Homework Answers
| Q | TC | TFC | MC= Change in TC | P | TR=(P)(Q) | MR= Change in TR |
| 0 | 3 | 3 | - | 15 | 0 | - |
| 1 | 12 | 3 | 9 | 14 | 14 | 14 |
| 2 | 19 | 3 | 7 | 13 | 26 | 12 |
| 3 | 25 | 3 | 6 | 12 | 36 | 10 |
| 4 | 30 | 3 | 5 | 10 | 40 | 4 |
| 5 | 36 | 3 | 6 | 9 | 45 | 5 |
| 6 | 45 | 3 | 9 | 8 | 48 | 3 |
| 7 | 56 | 3 | 11 | 7 | 49 | 1 |
| 8 | 70 | 3 | 14 | 6 | 48 | -1 |
4. At output level of 5 , total profit = TR-TC = $(45-36)= $9.
5. Profit maximizing condition under monopoly is MR=MC . We can see when Q=3 units , MR>MC and when Q=4 units , MR<MC . So , the firm produce 3 units to maximize profits. And the profit = $(36-25)= $11.
6. By plotting the demand curve we get the following graph :
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Extra Credit Question 11 Monopoly Consider the following table and answer the question. in the case...
Solve the chart. Refer to Chart 8. In MR column, (2) is: O a. 8. b.6....
Solve the chart.
Refer to Chart 8. In MR column, (2) is: O a. 8. b.6. O c. 12. O d. 10 Chart 8 (in the case of pure monopoly) Denotation: Q (total output, or product demand for each price), TVC (total variable cost). TFC (total fixed cost), MC (marginal cost), TR (total revenue), MR (marginal revenue) * Q TVC TFC MC Price 0 TR MR 0 2 1 2 9 16 2 2 3 22 8 68
Given the following information for a monopoly firm: Demand: P = 64-4(Q) Marginal revenue: MR =...
Given the following information for a monopoly firm: Demand: P = 64-4(Q) Marginal revenue: MR = 64 - 8(Q) Marginal cost: MC = 2(0)+10 Average total cost at equilibrium is 30 1. At what output (Q) will this firm maximize profit? 2. At what price (P) will this firm maximize profit 3. What is the total revenue (TR) earned at this output level 4. What is the total cost (TC) accrued at this output 5. What profit is earned Assume...
Practice Question 4. The inverse demand curve a monopoly faces is p = 30 – Q....
Practice Question 4. The inverse demand curve a monopoly faces is p = 30 – Q. The firm's total cost function is C(Q) = 0.5Q² and thus marginal cost function is MC(Q) = Q. (a) Determine the monopoly quantity, price and profit, and calculate the CS, PS and social welfare under the monopoly. (b) Determine the socially optimal outcome and calculate the CS, PS and social welfare under the social optimum. (c) Calculate the deadweight loss due to the monopolist...
Question 3: Consider a monopoly which faces the demand curve P= 55-2Q and having a marginal...
Question 3: Consider a monopoly which faces the demand curve P= 55-2Q and having a marginal cost function MC= 2Q-5. a) (2pts) Calculate the marginal revenue (MR) function. b) (2 pts) State the profit maximizing output rule for the monopoly in the short-run. c) (4 pts) What is the profit maximing output level? Next, calculate the price and the profit of the monopoly?
1. A monopoly is facing an inverse demand curve that is p=200-5q. There is no fixed cost and the marginal cost of produc...
1. A monopoly is facing an inverse demand curve that is
p=200-5q. There is no fixed cost and the marginal cost of
production is given and it is equal to 50.
Find the total revenue function.
Find marginal revenue (MR).
Draw a graph showing inverse demand, MR, and marginal cost
(MC).
Find the quantity (q) that maximizes the profit.
Find price (p) that maximizes the profit.
Find total cost (TC), total revenue (TR), and profit made by
this firm.
Find...
9. Regulating a natural monopoly Consider the local cable company, a natural monopoly
9. Regulating a natural monopoly Consider the local cable company, a natural monopoly. The following graph shows the monthly demand curve for cable services and the company's marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves. Suppose that the government has decided not to regulate this industry, and the firm is free to maximize profits, without constraints. Complete the first row of the following table. Suppose that the government forces the monopolist to set the price equal to marginal cost. Complete...
17. To maximize profits, a firm must choose its quantity at the point where... a. Total...
17. To maximize profits, a firm must choose its quantity at the point where... a. Total revenue (TR) - total cost (TC). b. Marginal revenue (MR)= marginal cost (MC). c. MR-MC is maximized. d. TR is maximized. 18. For a profit maximizing monopoly that uses the same price for all its customers, which of the following is true at the monopoly's profit maximizing quantity? a. MR =P b. MC-P. c. MR>P. d. MC>P. e. MR<P
Which of the following characteristics is NOT typical of a monopoly? There is a high demand...
Which of the following characteristics is NOT typical of a monopoly? There is a high demand for the product There are no close substitutes for the product. There are significant barriers to entry. There is only one seller. Which expression holds for the level of output at which a monopolist maximizes profit? MC < MR MC > MR MR <P MR = AVC A monopolist charges a price that is: what the market will bear. equal to the minimum of...
I have the solution, I just need to make sure that my graph is correct. 5....
I have the solution, I just need to make sure that my graph is
correct.
5. A monopolist faces the total revenue schedule TR = 4350q - 13q2 and the total cost schedule TC = 93 – 5.5 q2 + 150 q. Find it's profit-maximizing level of output. In a graph, draw its average revenue (AR), marginal revenue ( MR) and marginal cost (MC) functions and indicate the profit-maximizing level of output and price.
need help with all of them Question 6 (1 point) In perfect competition, marginal revenue is the change in revenue from...
need help with all of them
Question 6 (1 point) In perfect competition, marginal revenue is the change in revenue from selling an additional unit of output the revenue in excess of what can be earned in the next-best alternative the last dollar needed to make zero economic profit the extra revenue generated by a $1 change in price the last dollar needed to make maximum profit Question 7 (1 point) In which of the following situations should a profit-maximizing...
Solve the chart.
Refer to Chart 8. In MR column, (2) is: O a. 8. b.6. O c. 12. O d. 10 Chart 8 (in the case of pure monopoly) Denotation: Q (total output, or product demand for each price), TVC (total variable cost). TFC (total fixed cost), MC (marginal cost), TR (total revenue), MR (marginal revenue) * Q TVC TFC MC Price 0 TR MR 0 2 1 2 9 16 2 2 3 22 8 68
Given the following information for a monopoly firm: Demand: P = 64-4(Q) Marginal revenue: MR = 64 - 8(Q) Marginal cost: MC = 2(0)+10 Average total cost at equilibrium is 30 1. At what output (Q) will this firm maximize profit? 2. At what price (P) will this firm maximize profit 3. What is the total revenue (TR) earned at this output level 4. What is the total cost (TC) accrued at this output 5. What profit is earned Assume...
Practice Question 4. The inverse demand curve a monopoly faces is p = 30 – Q. The firm's total cost function is C(Q) = 0.5Q² and thus marginal cost function is MC(Q) = Q. (a) Determine the monopoly quantity, price and profit, and calculate the CS, PS and social welfare under the monopoly. (b) Determine the socially optimal outcome and calculate the CS, PS and social welfare under the social optimum. (c) Calculate the deadweight loss due to the monopolist...
Question 3: Consider a monopoly which faces the demand curve P= 55-2Q and having a marginal cost function MC= 2Q-5. a) (2pts) Calculate the marginal revenue (MR) function. b) (2 pts) State the profit maximizing output rule for the monopoly in the short-run. c) (4 pts) What is the profit maximing output level? Next, calculate the price and the profit of the monopoly?
1. A monopoly is facing an inverse demand curve that is
p=200-5q. There is no fixed cost and the marginal cost of
production is given and it is equal to 50.
Find the total revenue function.
Find marginal revenue (MR).
Draw a graph showing inverse demand, MR, and marginal cost
(MC).
Find the quantity (q) that maximizes the profit.
Find price (p) that maximizes the profit.
Find total cost (TC), total revenue (TR), and profit made by
this firm.
Find...
17. To maximize profits, a firm must choose its quantity at the point where... a. Total revenue (TR) - total cost (TC). b. Marginal revenue (MR)= marginal cost (MC). c. MR-MC is maximized. d. TR is maximized. 18. For a profit maximizing monopoly that uses the same price for all its customers, which of the following is true at the monopoly's profit maximizing quantity? a. MR =P b. MC-P. c. MR>P. d. MC>P. e. MR<P
Which of the following characteristics is NOT typical of a monopoly? There is a high demand for the product There are no close substitutes for the product. There are significant barriers to entry. There is only one seller. Which expression holds for the level of output at which a monopolist maximizes profit? MC < MR MC > MR MR <P MR = AVC A monopolist charges a price that is: what the market will bear. equal to the minimum of...
I have the solution, I just need to make sure that my graph is
correct.
5. A monopolist faces the total revenue schedule TR = 4350q - 13q2 and the total cost schedule TC = 93 – 5.5 q2 + 150 q. Find it's profit-maximizing level of output. In a graph, draw its average revenue (AR), marginal revenue ( MR) and marginal cost (MC) functions and indicate the profit-maximizing level of output and price.
need help with all of them
Question 6 (1 point) In perfect competition, marginal revenue is the change in revenue from selling an additional unit of output the revenue in excess of what can be earned in the next-best alternative the last dollar needed to make zero economic profit the extra revenue generated by a $1 change in price the last dollar needed to make maximum profit Question 7 (1 point) In which of the following situations should a profit-maximizing...
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