Subpart 4-6 Question 1:-Suppose that the monopolist faces a linear demand curve, P(Q) = A - BQ. Further supposethat the monopolist has the marginal cost function: MC = Q.1. Find the revenue as a function of Q.2. Find the marginal revenue as a function of Q.3. Find the quantity that maximizes the monopolist's profit as a function of A and B.4. Find the equilibrium price as a function of A and B.5. Let's use some numbers. Suppose A = 10 and B = 2. Solve for the profit-maximizingquantity and price.6. Using A = 10 and B = 2, draw a demand curve and a marginal revenue function as well asmarginal cost. Shade the deadweight loss. Also label clearly the profit-maximizing quantityand price chosen by the monopolist.7. What would have been the competitive equilibrium price and quantity (hint: equate MC andthe demand function)? Label the competitive equilbrium point. Also compute the size of thedeadweight loss due to inefficiency casued by the monopolist behavior.

Marginal revenue or MR is a main concept in microeconomics that explains the additional total…

pose that the monopolist faces a linear demand curve, P(Q) = A - BQ. Further s t the monopolist has the marginal cost function: MC = Q. Find the revenue as a function of Q. Find the marginal revenue as a function of Q. Find the quantity that maximizes the monopolist's profit as a function of A and B. Find the equilibrium price as a function of A and B. Let's use some numbers. Suppose A = 10 and B= 2. Solve for the profit-maximizin quantity and price. Using A = 10 and B = 2, draw a demand curve and a marginal revenue function as marginal cost. Shade the deadweight loss. Also label clearly the profit-maximizing qua and price chosen by the monopolist. What would have been the competitive equilibrium price and quantity (hint: equate

pose that the monopolist faces a linear demand curve, P(Q) = A - BQ. Further s t the monopolist has the marginal cost function: MC = Q. Find the revenue as a function of Q. Find the marginal revenue as a function of Q. Find the quantity that maximizes the monopolist's profit as a function of A and B. Find the equilibrium price as a function of A and B. Let's use some numbers. Suppose A = 10 and B= 2. Solve for the profit-maximizin quantity and price. Using A = 10 and B = 2, draw a demand curve and a marginal revenue function as marginal cost. Shade the deadweight loss. Also label clearly the profit-maximizing qua and price chosen by the monopolist. What would have been the competitive equilibrium price and quantity (hint: equate

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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