Problem 1.Market demand is P = 100-0.25Q, where Q is the total quantity demanded byconsumers. Monopoly's costs are C = 10Q. (10 marks)a) Calculate prices and quantities if the monopoly uses block pricing with two prices. CalculateCS, DWL and firm's profit and demonstrate on a diagram.b) Find firm's output and profit if the firm engages in perfect price discrimination. Show on adiagram.I

Prices and quantities under block pricing with two prices:For the first block: P1=10, Q1=360For…

Answered: Problem 1. Market demand is P =…

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter25: Monopoly

Section: Chapter Questions

Problem 14E

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Suppose the market for Hula Hoops is monopolized by a single firm. a. Draw the initial equilibrium for such a market. b. Now suppose the demand for Hula Hoops shifts outward slightly. Show that, in general (contrary to the competitive case), it will not be possible to predict the effect of this shift in demand on the market price of Hula Hoops. c. Consider three possible ways in which the price elasticity of demand might change as the demand curve shifts: It might increase, it might decrease, or it might stay the same. Consider also that marginal costs for the monopolist might be increasing, decreasing, or constant in the range where MR=MC Consequently, there are nine different combinations of types of demand shifts and marginal cost slope configurations. Analyze each of these to determine for which it is possible to make a definite prediction about the effect of the shift in demand on the price of Hula Hoops.
Problem 1. Market demand is P = 100– 0.25Q, where Q is the total quantity demanded by !3! consumers. Monopoly's costs are C– 10Q + 0.125Q2 +40. %3D a) Calculate prices and quantities if the monopoly uses block pricing with two prices. Calculate CS, DWL and firm's profit and demonstrate on a diagram. b) Find firm's output and profit if the firm engages in perfect price discrimination. Show on a diagram.
You are a consultant who is advising a monopoly on the optimal pricing strategy. Your analysis has yielded the following information. • The marginal cost (MC) is $3. • The demand equation is P = 90 - 3Q . The total cost (TC) is given by 35+ 3Q The marginal revenue (MR) is given by 90 - 6Q Based on this information, answer the following questions. Show FULL calculations! (a) Following the concepts of profit maximization, what is the profit maximizing quantity for this monopoly? (b) Following the concepts of profit maximization, what is the profit maximizing price for this monopoly? (c) Following the concepts of profit maximization, what is the monopoly's profit at the profit maximization point?
Hot Air Balloon Rides is a single-price monopoly. Columns 1 and 2 of the table set out the market demand schedule and columns 2 and 3 set out the total cost schedule. Calculate Hot Air's profit-maximizing output and price. Calculate the economic profit. Hot Air's profit-maximizing number of rides is 3 a month and the profit-maximizing price is $160 a ride. >>> Answer to 1 decimal place. C Price (dollars per ride) 220 200 180 160 140 120 Quantity (rides per month) ܘ ܝ ܚ ܚ ܟ ܗ 2 3 4 5 Total cost (dollars per month) 80 160 280 440 640 880
The figure below depicts the market demand curve a monopoly firm faces. If the monopoly firm successfully practices first-degree price discrimination, the firm's total revenue amounts to Price $40- 30 20 10 0 100 200 Marginal Revenue 300 400 Marginal Cost Demand Quantity Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.

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