8. A drug company has a monopoly on a new class of corticosteroid. The market demand...
8. A drug company has a monopoly on a new class of corticosteroid. The market demand is given by P = 210 - 0.003×Q. The monopolist's costs are described by TC = 3,000,000 + 3Q. The profit-maximizing quantity is? ___________
Homework Answers
Profit-maximizing quantity can be calculated by using the first-order condition for maximization ie., by differentiating profit function with respect to quantity:
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8. A drug company has a monopoly on a new class of
corticosteroid. The market demand...
In a market, the inverse demand is P = 60 - Q. A monopoly company operating...
In a market, the inverse demand is P = 60 - Q. A monopoly company operating in this market has the cost function C = 200. (a) What is the marginal cost of the company? What are the fixed costs? (b) Illustrate demand, marginal cost, and marginal revenue in a figure. (c) What is the profit-maximizing quantity? Explain why. What is the price thus? Illustrate in the figure. (d) Now suppose that the cost function is instead C=F+Q', which means...
2. In a market, the demand is Q = 50 - P. A monopoly company operating...
2. In a market, the demand is Q = 50 - P. A monopoly company operating in this market has the cost function C = 150. (a) Illustrate demand, marginal cost, and marginal revenue in a figure. (b) What is the profit-maximizing quantity? Explain why. What is the price thus? Illustrate in the figure. (c) Now suppose that the cost function is instead C = F+Q? which means that the fixed cost is F and MC = 20. How big...
The Company X has a monopoly on the beer market. Market demand is given by ??...
The Company X has a monopoly on the beer market. Market demand is given by ?? = 200 - 4? and the company's short-term cost as a function of ? is given by ? (?) = ?2 + 40 What is the monopolist's total revenue (?) as a function of ? and what is the monopolist's total profit (?) as a function of ??
Questions 7 - 9 use the following information: A monopolist faces inverse market demand of P...
Questions 7 - 9 use the following information: A monopolist faces inverse market demand of P = 230 – , and has Total Cost given by TC(Q) = 5Q2 + 10Q + 1000. 7. (20 points) Find this monopolist's profit maximizing output level. 8. Find this monopolist's profit maximizing price. 9. How much profit is this monopolist earning?
Problem 3: A market with a monopoly producer has inverse demand P = 120 - 2Q...
Problem 3: A market with a monopoly producer has inverse demand P = 120 - 2Q (which gives marginal revenue MR = 120 - 4Q). The monopolist has marginal costs are MCQ) = 4Q and no fixed costs. a) What is the monopolist's producer surplus when it charges the profit maximizing uniform price. b) What is the deadweight loss due to monopoly in this market? c) What would the monopolist's producer surplus be if it could engage in first degree...
A monopolist faces inverse market demand of P = 140- TC(Q) = 20° + 10Q +...
A monopolist faces inverse market demand of P = 140- TC(Q) = 20° + 10Q + 200. and has Total Cost given by (20 points) Find this monopolist's profit maximizing output level. Find this monopolist's profit maximizing price How much profit is this monopolist earning?
A monopolist faces a demand curve P = 210 - 3Q and faces a constant marginal cost MC = 15.
A monopolist faces a demand curve P = 210 - 3Q and faces a constant marginal cost MC = 15. a) Calculate the profit-maximizing monopoly quantity and compute the monopolist's total revenue at the optimal price. d) Suppose that this monopoly opens for competition and the market becomes perfectly competitive. The firms face constant marginal cost MC = 15. Find the long-run perfectly competitive industry price and quantity.
Question 3 Monopoly a) Discuss how monopoly markets discriminate prices by using the concept of market...
Question 3 Monopoly a) Discuss how monopoly markets discriminate prices by using the concept of market segmentation. b) The market demand curve for a monopoly firm is given as P = 200 – 20. Furthermore, the marginal cost is represented by the equation MC = 20 + 20. The firm's TC can be expressed as TC = 200 + Q2 + 100. Use this information to answer the questions and calculate the following: i) Profit maximizing quantity and price. ii)...
Suppose demand in a market is P 120 Q 240 2P This is a monopoly market,...
Suppose demand in a market is P 120 Q 240 2P This is a monopoly market, where MC = 30. There are no fixed costs. (a) Illustrate demand, marginal cost and marginal revenue in a figure (b) What is the profit-maximizing quantity? Explain why. How big is the profit? (e) How large is the socio-economically optimal quantity? Explain why. How big is the loss of welfare if you instead choose the quantity that maximizes the profits of the monopoly company?...
A pharmaceutical company has a monopoly over a newly invented drug. The marginal cost of producing...
A pharmaceutical company has a monopoly over a newly invented drug. The marginal cost of producing each bottle is $10.00. The demand curve for the drug is given by Qd = -5P + 1000. Assume the equilibrium quantity is 200. Find the profit maximizing price and the profit.
In a market, the inverse demand is P = 60 - Q. A monopoly company operating in this market has the cost function C = 200. (a) What is the marginal cost of the company? What are the fixed costs? (b) Illustrate demand, marginal cost, and marginal revenue in a figure. (c) What is the profit-maximizing quantity? Explain why. What is the price thus? Illustrate in the figure. (d) Now suppose that the cost function is instead C=F+Q', which means...
2. In a market, the demand is Q = 50 - P. A monopoly company operating in this market has the cost function C = 150. (a) Illustrate demand, marginal cost, and marginal revenue in a figure. (b) What is the profit-maximizing quantity? Explain why. What is the price thus? Illustrate in the figure. (c) Now suppose that the cost function is instead C = F+Q? which means that the fixed cost is F and MC = 20. How big...
Questions 7 - 9 use the following information: A monopolist faces inverse market demand of P = 230 – , and has Total Cost given by TC(Q) = 5Q2 + 10Q + 1000. 7. (20 points) Find this monopolist's profit maximizing output level. 8. Find this monopolist's profit maximizing price. 9. How much profit is this monopolist earning?
Problem 3: A market with a monopoly producer has inverse demand P = 120 - 2Q (which gives marginal revenue MR = 120 - 4Q). The monopolist has marginal costs are MCQ) = 4Q and no fixed costs. a) What is the monopolist's producer surplus when it charges the profit maximizing uniform price. b) What is the deadweight loss due to monopoly in this market? c) What would the monopolist's producer surplus be if it could engage in first degree...
A monopolist faces inverse market demand of P = 140- TC(Q) = 20° + 10Q + 200. and has Total Cost given by (20 points) Find this monopolist's profit maximizing output level. Find this monopolist's profit maximizing price How much profit is this monopolist earning?
Question 3 Monopoly a) Discuss how monopoly markets discriminate prices by using the concept of market segmentation. b) The market demand curve for a monopoly firm is given as P = 200 – 20. Furthermore, the marginal cost is represented by the equation MC = 20 + 20. The firm's TC can be expressed as TC = 200 + Q2 + 100. Use this information to answer the questions and calculate the following: i) Profit maximizing quantity and price. ii)...
Suppose demand in a market is P 120 Q 240 2P This is a monopoly market, where MC = 30. There are no fixed costs. (a) Illustrate demand, marginal cost and marginal revenue in a figure (b) What is the profit-maximizing quantity? Explain why. How big is the profit? (e) How large is the socio-economically optimal quantity? Explain why. How big is the loss of welfare if you instead choose the quantity that maximizes the profits of the monopoly company?...
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