ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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For Question#4 and Question#5 below, how do you get 93 and 5059?

 

 

Suppose a single-price monopolist faces an inverse market demand curve given by P(Q) = 310-0.75Q and has a cost curve given by C(Q) = 100 + 40Q + 0.500
Question 1
How many units will the monopolist provide in the market equilibrium?
Equilbrium quantity: 108. (Round your answer to two decimal places and use in subsequeont calculations.)
Question 2
What are the economic profits of this monopolist?
Economic profits: 14480. (Round your answer to the nearest whole number.)
Question 3
How many of the profits are "unearned"? L.e., what are the economic rents of this monopolist?
Economic rents: 8748. (Round your answer to the nearest whole number.)
For the next two questions, consider the impact of a 22% ad valorem tax imposed on the consumers in this market.
Question 4
What quantity will be sold in the after-tax equilibrium?
Equilibrium quantity: 93.00 units. (Round your answer to two decimal places and use in subsequent calculations.)
Question 5
What are the economic rents of the monopolist after this policy is imposed?
Economic rents: 5059. (Round your answer to the nearest whole number.)
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Transcribed Image Text:Suppose a single-price monopolist faces an inverse market demand curve given by P(Q) = 310-0.75Q and has a cost curve given by C(Q) = 100 + 40Q + 0.500 Question 1 How many units will the monopolist provide in the market equilibrium? Equilbrium quantity: 108. (Round your answer to two decimal places and use in subsequeont calculations.) Question 2 What are the economic profits of this monopolist? Economic profits: 14480. (Round your answer to the nearest whole number.) Question 3 How many of the profits are "unearned"? L.e., what are the economic rents of this monopolist? Economic rents: 8748. (Round your answer to the nearest whole number.) For the next two questions, consider the impact of a 22% ad valorem tax imposed on the consumers in this market. Question 4 What quantity will be sold in the after-tax equilibrium? Equilibrium quantity: 93.00 units. (Round your answer to two decimal places and use in subsequent calculations.) Question 5 What are the economic rents of the monopolist after this policy is imposed? Economic rents: 5059. (Round your answer to the nearest whole number.)
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