Question

I. Suppose a monopolist has C(Q)20 + 2Q, and the demand curve it faces is Q- 200p-2. What w be the price, quantity, and prof for this firm? Calculate the deadweight loss resulting from the monopoly in this market. What are producer surplus consumer surplus, and total surplus under monopoly and at the efficient level? 2. Which of the following are na tural monopolies? Explain your answers a. Firms cach have C(q)-10+q b. Firms cach have C(q) 1000000 +1000000q c. Firms each have C(q)-100 + q + q2 and demand is QU-12-p d. Firms each have C(q) = 100 + q + q2 and demand is Qu = 300-p 3. The biggest private-sector employer in Center City Philadelphia is Comcast. Suppose Comcast is currently a monopsonist in the city's market for soft ware engineers, and that if Amazon had chosen Philadelphia as the location of its "HQ2" then Comcast would have had to pay the competitive wage for soft ware engineers. Considering these labor market effects alone, if Comcast's demand curve for this type of specialized labor is Q35-(where the quantity is in thousands and the wage is in $/hr), and the market 15 2w supply curve is Qshow much would it have been worth to Comcast for Amazon not to have chosen Philly? 4. Find all pure-strategy and mixed-strategy Nash equilibria of the following two-player simultancous-move games Player B Right Left Up Player A Down 6,11 Player E Left Right Player A Down 0.16 2,13

Answer 1

Givon -tear; monopolist eco:0 "Go paice、 acontity and prat -to-Rom ( 1 , с cto): 6 20 420. 200 (20 + 22) 朱のー or酉 2.00 D00

200 20oe 15 Paice , p : 200 : 200 12.5 1G Paice (P) P:O (difhesentiating 20+20) :200 & 50

-At monorele . paice 12.5q ,'·)TR:50 c20 2 (15) : 50 45 Oton boluceen tRo paice g duan ti 50

mela 1 Deod C50-12. 5 ) C50-12-5) b88 coeynt 左4(a-2)* : : ф 31.5 mono i3 doad coeight (o3 oa าณิ