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- Consider the case where there is a consumer in the market with a demand of P = 60 - 2q. A monopolist has variable costs of VC = 2q² where Pis price and q the quantity sold. The monopolist engages in first degree price discrimination using a two-part tariff, what is the fixed fee (F) and per-unit fee charged (p)? OF=200, p = 20 OF=150, p = 20 OF=100, p = 40 OF=400, p = 40 HideExercise A.6 A monopolist facing the demand curve Q = 42 – 0.6P operates with constant average and marginal costs equal to 20. a) Calculate the quantity, price and profit obtained by the monopolist. Represent graphically. (b) What quantity, what price and what benefit will you get if you can apply first-degree price discrimination? Calculate the consumer surplus and represent graphically. c) The monopolist warns that he can separate consumers into two distinct groups with demands Q1 = 12 - 0.1P1 and Q2 = 30 - 0.5P2. Calculate the quantities, the prices you will set in each market, and the profit you will make. Represent graphically.Suppose a monopolist knows it has two types of customers. The inverse demand for the customers in the first market is P = 60 - Q while the inverse demand for the customers in the second market is P 50 2Q. The marginal cost is €10 in both markets. Suppose the firm wishes to charge a two-part tariff to its customers but it cannot distinguish between the customers in the first and second markets Calculate the entry (fixed) fee that the firm should charge in these circumstances.
- The figure at right shows the demand line, marginal revenue line, and cost curves for a single-price monopolist. Now suppose the monopolist is able to charge a different price on each different unit sold. 200- The profit-maximizing quantity for the monopolist is 400. (Round your response to the nearest whole number.) 180 160- MC The price charged for the last unit sold by this monopolist is s450 (Round your 140- response to the nearest dollar) 2 120, ATC The monopolist's profit is $ 50. (Round your response to the nearest dollar.) 100- 80 60- 40- 20- MR D- 76 150 225 300 375 450 525 600 675 750 Quantity Price (S)3. Consider a monopolist who faces the following demand: Demand: P= 100 – 10Q MC= 50+20 a) Find the price quantity combination that maximizes profit for the monopolist. b) Is the firm making positive, negative or zero profits? (100,100) Kareem chooses (60, 105) (500, 400) Saleem chooses Kareem chooses (50,420) 4. Calculate the SPNE/SPNES for the game stated above.A monopolist sells to two groups of consumers who have demand curves given as follows: q1 (p1) = 100-p1 q2 (p2) = 100-2p2 The monopolist’s marginal cost is constant at $20 per unit, and there are no fixed costs. What price will it charge if it cannot price discriminate? How many units will it sell? Does monopolist prefer to price-discriminate or to apply uniform pricing? Hand written solutions are strictly prohibited
- All 20 consumers are alike and each has a demand curve for a monopolist's product of p=15 -3q. The cost of production C(Q) =2Q. Let the monopolist charge a price of $PM for qM unit purchased. Find the menu prices that maximize profits? (The buyer pays menu price PM for quantity qM) What is the maximum profit the monopolist can earn in this market? (pi)?A monopolist has a constant marginal cost of 18. Consumers' inverse demand is P = 43 - 4Q. The monopolist runs a persuasive advertising campaign that costs 10 and increases consumer demand to P 48 - 4Q. (a) What is the gain (or loss) in the firms profits caused by the advertising campaign? (b) When consumers' pre-advertising preferences are used to calculate welfare, what is the welfare gain (or loss) caused by the advertising campaign? (c) When consumers' post-advertising preferences are used to calculate welfare, what is the welfare gain (or loss) caused by the advertising campaign?A monopolist has a constant marginal cost of 12. Consumers' inverse demand is P = 32 - 4Q. The monopolist runs a persuasive advertising campaign that costs 26 and increases consumer demand to P = 37 - 4Q. (a) What is the gain (or loss) in the firms profits caused by the advertising campaign? b) When consumers' pre-advertising preferences are used to calculate welfare, what is the welfare gain (or loss) caused by the advertising campaign? Answer 2 Question 1 (c) When consumers' post-advertising preferences are used to calculate welfare, what is the welfare gain (or loss) caused by the advertising campaign? Answer 3 Question 1
- Consider a monopolist with a demand equation P = 60 - 2Q, where P is the price in dollars and Q is the quantity. The monopolist is able to produce the output with a constant marginal cost of $20 which is equals to the average total cost. Assume that there is no fixed cost. A. If the monopolist practice single pricing, determine the price, quantity, profit, consumer surplus and producer surplus in this market with the aid of a suitable diagram. Appraise the efficiency in this market. B. If the monopolist were to practice perfect price discrimination, determine the quantity, profit, consumer surplus and producer surplus of the monopolist. Appraise the efficiency in this market. C. Consumers and the society are always worse off in a monopolised market compared to a perfectly competitive market. Do you agree? Examine the two (2) market structures and explain with the help of a suitable market diagram.A monopolist has the demand and marginal cost as shown in the table below. There is no fixed cost in the production. Quantity Marginal Cost 2 Price 10 1 9. 2 3 8 3 4 7 4 5 5 (i) If the monopolist practices single pricing, determine the price, quantity, and profit of the monopolist. Explain how the quantity is determined. (ii) If the monopolist practices perfect price discrimination, determine the price, quantity and profit in the market.Suppose a monopolist faces the demand curve P = 120 - 2Q, has marginal cost curve MC = 2Q, and zero fixed costs. If the monopolist can perfectly price discriminate, which of the following is true? The monopolist sells 30 units at a profit of 1800. The monopolist sells 17 units at a profit of 1460. The monopolist sells 30 units at a profit of 900. The monopolist sells 17 units at a profit of 730.
