ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Suppose that a monopolist's market demand is given by
P = 180-2Q and that marginal cost is given by MC =
Q/2 a. Sketch this market. Be sure to label the axes and
any line (or curve) that you draw. b. Calculate the profit
- maximizing monopoly price and quantity. Round the P
and Q to the nearest tenth. Show these points on the
graph. c. Calculate the price and quantity under perfect
competition with a supply curve P = Q/2. Round the P
and Q to the nearest tenth. Show these points on the
graph. d. What is the consumer surplus (CS) and
producer surplus (PS) for both monopoly and perfect
competition? Note: use the P and Q rounded to the
nearest tenth to calculate CS and PS, and round the CS
and PS to the nearest integer). e. What is the
deadweight loss due to monopoly? Round to the
nearest integer.
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Transcribed Image Text:Suppose that a monopolist's market demand is given by P = 180-2Q and that marginal cost is given by MC = Q/2 a. Sketch this market. Be sure to label the axes and any line (or curve) that you draw. b. Calculate the profit - maximizing monopoly price and quantity. Round the P and Q to the nearest tenth. Show these points on the graph. c. Calculate the price and quantity under perfect competition with a supply curve P = Q/2. Round the P and Q to the nearest tenth. Show these points on the graph. d. What is the consumer surplus (CS) and producer surplus (PS) for both monopoly and perfect competition? Note: use the P and Q rounded to the nearest tenth to calculate CS and PS, and round the CS and PS to the nearest integer). e. What is the deadweight loss due to monopoly? Round to the nearest integer.
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