ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- A monopolist has four distinct groups of customers: group A has an elasticity of demand of 0.2, group B has an elasticity of demand of 0.8, group C has an elasticity of demand of 1.0, and group D has an elasticity of demand of 2.0. The group paying the highest price for the product will be group: a) D. b) C. c) B. d) A.arrow_forwardConsider a monopolist facing a market demand given by: P = 200 - 4Q. Where P is the price and Q is the quantity. The monopolist produces the good according to the cost function c(Q) = Q2 + 5. Determine the profit maximizing quantity and price the monopolist will offer in the market. Calculate the profits for the monopolist. Calculate the deadweight loss due to a monopoly. Illustrate this in a well labelled diagram. I will thumbs up solution if it is original answer and not from ChatGPT, if ChatGPT is used I will thumbs-down and report to Chegg as ChatGPT returns the incorrect answer here and I'm stuck. Thank you! :)arrow_forwardA monopolist faces an inverse demand curve P(q) = 28 – 3q. The cost curve is C(q) = 10q. What is deadweight loss in this market? (a) DWL = 3 (b) DWL = 27/2 (c) DWL = 19 (d) DWL = 27 (e) None of the above.arrow_forward
- Assume that a monopolist faces a demand curve for its product given by: p=130−3q Further assume that the firm's cost function is: TC=490+10q What is the profit for the firm at the optimal quantity and price?arrow_forwardA monopolist has a cost function c(q) = 5q+800 and faces aggregate demand q=3000 - 120p. Suppose first that monopolist sells q=400 units. The monopolist's revenue would be The monopolist profit would be The absolute value of the price elasticity of demand would be The consumer surplus would be Now suppose that the monopolist chooses q to maximize its profit. The monopolist's revenue would be The monopolist profit would be The absolute value of the price elasticity of demand would be The consumer surplus would bearrow_forwardA market is characterized by an inverse demand equal to P = 500 – 4Q and total cost of production equal to TC(Q) = 20Q. Compute equilibrium quantity, price, and profit when there is a single monopolist.arrow_forward
- The function Q= 14 - P represent the market demand. The cost function of the monopolist is C= 2Q. a) Find quantity, price and profit of the monopolist. b) Given the results of point (a), what is the firm's percentage mark-up of price over marginal cost? c) Suppose that now we have a market demand with elasticity equal to -2. If the price is 8, what should be the marginal cost of the last unit produced?arrow_forwardFor a monopolist's product, the demand equation is p=29−4q and the average-cost function is c=5+ 40/q. Find the profit-maximizing price.arrow_forwardA Monopolist has the following demand, marginal revenue, and marginal cost: p = 100 – 5q mr = 100 – 25q mc = 25 How much higher will the monopoly price be than the perfectly competitive price?arrow_forward
- Assume you were provided the following information for a monopolist: Inverse Demand Function: P = 100 - 2Q Total Cost Function: TC = 10 + 2Q The monopolist has a constant marginal cost of $2. What is the profit maximizing level of output?arrow_forwardConsider a monopolist who faces the following demand function P = 100 – 2Q. The firm’s cost function is given by C(Q) = 10 + 2Q What are the profit maximizing output and price? What is the profit at this point?arrow_forwardAssume a market demand curve Y(p)=3000-15p and a firm’s marginal cost is 60 (MC=60), For a monopolist, solve for the optimal quantity supplied and prevailing market price.arrow_forward
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