1. The demand function in a market given by p(X) = 100- X, where X is the industry output. Campbell is a monopolist facing marginal cost c = 1. a. Calculate the monopoly output that Campbell produces? b. What is the monopolist price that Campbell charges? c. What is the total profit that Campbell earns? d. Sketch Campbell's inverse demand curve, marginal revenue and marginal cost curve on the same set of axes. Make sure to label all intercepts, lines and axes. i. Indicate where the profit-maximizing price and quantity are. ii. Shade/label the areas for total cost, total profit, consumer surplus and deadweight loss and calculate the numerical value of each of these. [ Area of a triangle: 2 * Base * Height]

1. The demand function in a market given by p(X) = 100- X, where X is the industry output. Campbell is a monopolist facing marginal cost c = 1. a. Calculate the monopoly output that Campbell produces? b. What is the monopolist price that Campbell charges? c. What is the total profit that Campbell earns? d. Sketch Campbell's inverse demand curve, marginal revenue and marginal cost curve on the same set of axes. Make sure to label all intercepts, lines and axes. i. Indicate where the profit-maximizing price and quantity are. ii. Shade/label the areas for total cost, total profit, consumer surplus and deadweight loss and calculate the numerical value of each of these. [ Area of a triangle: 2 * Base * Height]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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