All Clean is the only company selling all-in-one washer–dryer machines. The price of a machine is...
All Clean is the only company selling all-in-one washer–dryer machines. The price of a machine is P, while Q is the quantity of machines sold per quarter. After the firm implements sales commission, demand for these washer-dryer machines decreases. With the new cost functions, the following equations describe the new market for All Clean'smachines:
Demand: P = 300 – 2.5Q ♦ Total Cost: TC = 2000 + 150Q + 2.5Q2 ♦ Marginal Cost: MC = 150 + 5Q
_____________________________________________________
Given the changes in demand and costs, what is All Clean'snew profit-maximizing quantity? (Hint: consider finding the MR curve; remember the slope is twice the slope of the demand curve)
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All Clean is the only company selling all-in-one
washer–dryer machines. The price of a machine is...
Question 26 5 pts Price ATC MC AVC DD . m 0 Quantity Refer to the...
Question 26 5 pts Price ATC MC AVC DD . m 0 Quantity Refer to the diagram above. At the point markede, o price is determining production at a level where P = AVC o TR is exactly equal to TC, so profits equal zero. o price is above average cost of production. o the leftover rectangle is the profit earned. Question 28 4 pts The following figure shows the average cost curve, demand curve, and marginal revenue curve for...
Problem 1e. The slope of the demand curve indicates that if the price of Fluff increases...
Problem 1e. The slope
of the demand curve indicates that if the price of Fluff increases
by 20 cents, consumers will buy one less unit. Determine what
happens to profit if price is increased by calculating the new
profit level for Fluff when price is set 20 cents higher than the
profit-maximizing price.
problem 2
Probem 3
Consider the graph, which illustrates the demand for Fluff. Fluff can be produced at a constant marginal and average total cost of $4...
1. What is a monopoly? Name 2 differences between a monopoly and a perfectly competitive market....
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A natural monopolist faces the following demand curve: P = 202 - 5Q, its total cost is given by: ...
A natural monopolist faces the following demand curve: P = 202 - 5Q, its total cost is given by: TC = 720 + 2Q (marginal cost is the slope of total cost). (a) If the government regulates the monopolist to charge a socially optimal price, what price will it charge and how many units will it sell? How much are the profit, consumer surplus and producer surplus? (b) If it is not a regulated monopolist, what is its profit maximizing...
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...
3. Show that MR follows the notion "same intercept, twice the slope" of demand. 4. Is...
3. Show that MR follows the notion "same intercept, twice the slope" of demand. 4. Is a monopoly the most socially optimal market? How does a monopoly differ from a perfectly competitive market? Explain and show in a graph. What is the difference in welfare? 5. At what point would a monopoly decide to shut down in the short-run? In the long run? 6. A firm facing demand curve p= 24-Q and MC=2Q has a new demand curve of p=36-2Q...
A monopolist’s inverse demand is P=500-2Q, the total cost function is TC=50Q2 + 1000Q and Marginal...
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This question introduces a fundamental result of taxation which will revisit in the last chapter. We...
This question introduces a fundamental result of taxation which will revisit in the last chapter. We can already see it at work through the following example: A firm faces the following demand curve: P = 120 – 0.02Q Where Q is weekly production and P is price, measured in cents per unit. The firm’s total cost function is given by TC = 60Q + 25,000. Assume that the firm maximizes profit. a. What is the level of production, price, and...
Question 3-4 SESSION 13 The marginal revenue is the rate of change in total revenue per...
Question 3-4
SESSION 13 The marginal revenue is the rate of change in total revenue per unit increase in output, Q The marginal cost is the rate of change in total cost per unit increase in output, Q AR is defined as average revenue per unit for the first Q su ccessive units sold. AR is determined by dividing total reven ue by the quantity sold, Q The AR function is equal to price, P. where Pis given by the...
Chapter 11 1. You are a self-employed profit-maximization consultant specializing in monopolies. Five single-price, profit-maximizing monopolies...
Chapter 11 1. You are a self-employed profit-maximization consultant specializing in monopolies. Five single-price, profit-maximizing monopolies are currently seeking your advice, and al- though the information they have supplied to you is incomplete, your expert knowledge allows you to go back and make a definite recommendation in each case. Select one of the following recommendations for each firm in the short run: a. Remain at the current output level. b. Increase output. c. Reduce output. d. Shut down. e. Go...
Question 26 5 pts Price ATC MC AVC DD . m 0 Quantity Refer to the diagram above. At the point markede, o price is determining production at a level where P = AVC o TR is exactly equal to TC, so profits equal zero. o price is above average cost of production. o the leftover rectangle is the profit earned. Question 28 4 pts The following figure shows the average cost curve, demand curve, and marginal revenue curve for...
Problem 1e. The slope
of the demand curve indicates that if the price of Fluff increases
by 20 cents, consumers will buy one less unit. Determine what
happens to profit if price is increased by calculating the new
profit level for Fluff when price is set 20 cents higher than the
profit-maximizing price.
problem 2
Probem 3
Consider the graph, which illustrates the demand for Fluff. Fluff can be produced at a constant marginal and average total cost of $4...
1. What is a monopoly? Name 2 differences between a monopoly and a perfectly competitive market. 2. What is the profit maximizing condition for a price-setting monopoly? 3. Show that MR follows the notion "same intercept, twice the slope" of demand. 4. Is a monopoly the most socially optimal market? How does a monopoly differ from a perfectly competitive market? Explain and show in a graph. What is the difference in welfare? 5. At what point would a monopoly decide...
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...
3. Show that MR follows the notion "same intercept, twice the slope" of demand. 4. Is a monopoly the most socially optimal market? How does a monopoly differ from a perfectly competitive market? Explain and show in a graph. What is the difference in welfare? 5. At what point would a monopoly decide to shut down in the short-run? In the long run? 6. A firm facing demand curve p= 24-Q and MC=2Q has a new demand curve of p=36-2Q...
Question 3-4
SESSION 13 The marginal revenue is the rate of change in total revenue per unit increase in output, Q The marginal cost is the rate of change in total cost per unit increase in output, Q AR is defined as average revenue per unit for the first Q su ccessive units sold. AR is determined by dividing total reven ue by the quantity sold, Q The AR function is equal to price, P. where Pis given by the...
Chapter 11 1. You are a self-employed profit-maximization consultant specializing in monopolies. Five single-price, profit-maximizing monopolies are currently seeking your advice, and al- though the information they have supplied to you is incomplete, your expert knowledge allows you to go back and make a definite recommendation in each case. Select one of the following recommendations for each firm in the short run: a. Remain at the current output level. b. Increase output. c. Reduce output. d. Shut down. e. Go...
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