A monopolist has its total costs (TC) of production given in Table 3. The (inverse) demand
curve it faces in the market is described by this equation: P = a − bQ = 3, 000 − (31.15)Q. Table 3: Total Costs for a Monopolist
Q |
TC |
Q |
TC |
||
0 |
800 |
21 |
6243.2 |
||
1 |
1131.2 |
22 |
6977.6 |
||
2 |
1409.6 |
23 |
7810.4 |
||
3 |
1642.4 |
24 |
8748.8 |
||
4 |
1836.8 |
25 |
9800 |
||
5 |
2000 |
26 |
10971.2 |
||
6 |
2139.2 |
27 |
12269.6 |
||
7 |
2261.6 |
28 |
13702.4 |
||
8 |
2374.4 |
29 |
15276.8 |
||
9 |
2484.8 |
30 |
17000 |
||
10 |
2600 |
31 |
18879.2 |
||
11 |
2727.2 |
32 |
20921.6 |
||
12 |
2873.6 |
33 |
23134.4 |
||
13 |
3046.4 |
34 |
25524.8 |
||
14 |
3252.8 |
35 |
28100 |
||
15 |
3500 |
36 |
30867.2 |
||
16 |
3795.2 |
37 |
33833.6 |
||
17 |
4145.6 |
38 |
37006.4 |
||
18 |
4558.4 |
39 |
40392.8 |
||
19 |
5040.8 |
40 |
44000 |
||
20 |
5600 |
PLEASE SHOW HOW TO GRAPH IN EXCEL!!!
3(b). Draw the MC and ATC curves using the values derived for 3(a). Draw the inverse demand curve and its corresponding MR curve. Note: for the MR curve, be sure to use the equation learned in class, M R = a − 2bQ.
3(c). What is the price (PM ) and quantity (QM ) that the monopolist will choose in order to maximize pro t?
3(d). What is their total pro t from the price and quantity combination in 3(c)?3(e). What is the consumer surplus when they charge the price PM from 3(c)?
3(a):
I've calculated MC and ATC in the table below. I've also calculated price based on the inverse demand formula: 3000 - 31.15Q and the Marginal revenue based on the formula: 3000 - 62.3Q.
Q | TC | ATC | MC | Price | MR |
0 | 800 | 3000 | 3000 | ||
1 | 1131.2 | 1131.2 | 331.2 | 2968.85 | 2937.7 |
2 | 1409.6 | 704.8 | 278.4 | 2937.7 | 2875.4 |
3 | 1642.4 | 547.4667 | 232.8 | 2906.55 | 2813.1 |
4 | 1836.8 | 459.2 | 194.4 | 2875.4 | 2750.8 |
5 | 2000 | 400 | 163.2 | 2844.25 | 2688.5 |
6 | 2139.2 | 356.5333 | 139.2 | 2813.1 | 2626.2 |
7 | 2261.6 | 323.0857 | 122.4 | 2781.95 | 2563.9 |
8 | 2374.4 | 296.8 | 112.8 | 2750.8 | 2501.6 |
9 | 2484.8 | 276.0889 | 110.4 | 2719.65 | 2439.3 |
10 | 2600 | 260 | 115.2 | 2688.5 | 2377 |
11 | 2727.2 | 247.9273 | 127.2 | 2657.35 | 2314.7 |
12 | 2873.6 | 239.4667 | 146.4 | 2626.2 | 2252.4 |
13 | 3046.4 | 234.3385 | 172.8 | 2595.05 | 2190.1 |
14 | 3252.8 | 232.3429 | 206.4 | 2563.9 | 2127.8 |
15 | 3500 | 233.3333 | 247.2 | 2532.75 | 2065.5 |
16 | 3795.2 | 237.2 | 295.2 | 2501.6 | 2003.2 |
17 | 4145.6 | 243.8588 | 350.4 | 2470.45 | 1940.9 |
18 | 4558.4 | 253.2444 | 412.8 | 2439.3 | 1878.6 |
19 | 5040.8 | 265.3053 | 482.4 | 2408.15 | 1816.3 |
20 | 5600 | 280 | 559.2 | 2377 | 1754 |
21 | 6243.2 | 297.2952 | 643.2 | 2345.85 | 1691.7 |
22 | 6977.6 | 317.1636 | 734.4 | 2314.7 | 1629.4 |
23 | 7810.4 | 339.5826 | 832.8 | 2283.55 | 1567.1 |
24 | 8748.8 | 364.5333 | 938.4 | 2252.4 | 1504.8 |
25 | 9800 | 392 | 1051.2 | 2221.25 | 1442.5 |
26 | 10971.2 | 421.9692 | 1171.2 | 2190.1 | 1380.2 |
27 | 12269.6 | 454.4296 | 1298.4 | 2158.95 | 1317.9 |
28 | 13702.4 | 489.3714 | 1432.8 | 2127.8 | 1255.6 |
29 | 15276.8 | 526.7862 | 1574.4 | 2096.65 | 1193.3 |
30 | 17000 | 566.6667 | 1723.2 | 2065.5 | 1131 |
31 | 18879.2 | 609.0065 | 1879.2 | 2034.35 | 1068.7 |
32 | 20921.6 | 653.8 | 2042.4 | 2003.2 | 1006.4 |
33 | 23134.4 | 701.0424 | 2212.8 | 1972.05 | 944.1 |
34 | 25524.8 | 750.7294 | 2390.4 | 1940.9 | 881.8 |
35 | 28100 | 802.8571 | 2575.2 | 1909.75 | 819.5 |
36 | 30867.2 | 857.4222 | 2767.2 | 1878.6 | 757.2 |
37 | 33833.6 | 914.4216 | 2966.4 | 1847.45 | 694.9 |
38 | 37006.4 | 973.8526 | 3172.8 | 1816.3 | 632.6 |
39 | 40392.8 | 1035.713 | 3386.4 | 1785.15 | 570.3 |
40 | 44000 | 1100 | 3607.2 | 1754 | 508 |
A monopolist has its total costs (TC) of production given in Table 3. The (inverse) demand curve it faces in the market is described by this equation: P = a − bQ = 3, 000 − (31.15)Q. Table 3: Total Co...
Question 3 (worth 25% A monopolist has its total cost s (TC) of production given in Table 4. The (inverse) demand curve it faces in the market is described by this equation: P = a-BQ 5,000-(40)Q. Table 4: Tot al Costs for a Monopoli st TC 800 11181.4 21531.2 31857.8 4 2169.6 2475 6 2782.4 73100.2 8 3436.8 93800.6 10 4200 11 4643.4 125139.2 13 5695.8 14 6321.6 15 7025 16 7814.4 178698.2 18 9684.8 19 10782.6 20 12000 QI...
A monopolist faces inverse demand P = on TC(Q) = cQ. (a) Find the optimal price, P, and quantity, QM (b) Solve for the monopolist's optimal profits, TM (c) Graph the equilibrium and show consumer surplus, producer surplus and deadweight loss. Be 150 -3Q and total cost functi careful with the marginal cost curve. (d) Compute CS and PS. These will be functions of the cost parameter c. (e) Compute DWL. Similarly, it will be functions of the cost parameter...
A monopolist faces a market (inverse) demand curve P = 50 − Q . Its total cost is C = 100 + 10Q + Q2 . a. (1 point) What is the competitive equilibrium benchmark in this market? What profit does the firm earn if it produces at this point? b. (2 points) What is the monopoly equilibrium price and quantity? What profit does the firm earn if it produces at this point? c. (2 points) What is the deadweight...
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 market demand curve given by Q=70-P a. If the monopolist can produce at constant average and marginal costs ofAC-MC-6, what output level will the monopolist choose to maximize profits? What is the price at this output level? What are the monopolist's profits? b. Assume instead that the monopolist has a cost structure where total costs are described by C(Q) = 0.25Q2 - 5Q + 300. With the monopolist facing the same market demand and marginal revenue, what price-quantity combination will be chosen now...
The inverse demand curve for a monopolist's product is P=-Q/2 +60 and the TC curve for the monopolist is TC = 10Q + 200. How do you find the profit maximizing quantity and he profit maximizing price? Thanks!
2. Suppose a monopoly firm faces inverse market demand curve p a - bQ. Its average total cost (ACc) and marginal cost (MC) both equal c where c >0. Assume that a>0, a> c, and b> 0. Assume that the firm maximizes its profit. Depict and identify the following five concepts graphically (a) (i)the firm's profit-maximizing output QM (ii) the corresponding price PM, (ii) the socially optimal output Q* (iv) the firm's supernormal profit and (v) the deadweight loss. (b)...
2. Suppose a monopoly firm faces inverse market demand curve p a - bQ. Its average total cost (ACc) and marginal cost (MC) both equal c where c >0. Assume that a>0, a> c, and b> 0. Assume that the firm maximizes its profit. Depict and identify the following five concepts graphically (a) (i)the firm's profit-maximizing output QM (ii) the corresponding price PM, (ii) the socially optimal output Q* (iv) the firm's supernormal profit and (v) the deadweight loss. (b)...
A monopolist has a cost curve c(q) = q^2-12q+8 and faces an inverse demand curve p(q) = 80-20q. Find the monopolist price and quantity, (p,q).
Consider a situation where a monopolist faces the following inverse market demand curve p= 100 – 4 and the following cost function TC = 4q+72 a) Derive the marginal revenue and marginal cost functions. b) What are the equilibrium price and quantity if this market behaved as if it were perfectly competitive? c) Calculate the Consumer Surplus, Producer Surplus and Welfare levels under perfect com- petition. d) What are the equilibrium price and quantity when the monopolist produces as a...