Suppose that the Department of Justice (DOJ) vetoes all mergers that are likely to lead to an increase in price of the product. The market demand function is given by P(Q) = 50 – Q. Pre- merger, the market is competitive and the cost function is given by C(Q) = 30Q. Post-merger, the market will be controlled by a monopolist and C(Q) = xQ. For what values of r will the DOJ approve this merger?

A profit maximizing monopolist has a cost function C (q) = q,where q > 0 denotes the amount produced, and faces the aggregate demand curve q = 100/p² where p > 0 denotes the price per unit in the market. Assume that the monopolist chooses an optimal price in the range p E [1, 3]. The optimal price the monopolist would set up is while the Lerner index is_ Blank # 1 Blank # 2

A key difference between monopoly and perfect competition is    options:   the demand curve faced by a perfectly competitive firm is different than the industry demand curve, but the demand curve faced by the monopolist is the same as the industry demand curve.   Perfectly competitive firms have considerably more market power compared to monopolists.   Price equals marginal revenue for a monopolist, but not for a perfectly competitive firm.   the demand curve faced by a monopolist is different than the industry demand curve, but the demand curve faced by a perfectly competitive firm is the same as the industry demand curve.

A monopoly produces a good with a network externality at a constant marginal and average cost of c = $2. In the first period, its inverse demand curve is p 14-1Q. In the second period, its inverse demand curve is p=14-1Q unless it sells at least Q = 8 units in the first period. If it meets or exceeds this target, then the demand curve rotates out by a (it sells a times as many units for any given price), so that its inverse demand curve is p=14- - 1/10. The monopoly knows that it can sell no output after the second period. The monopoly's objective is to maximize the sum of its profits over the two periods. For what values of a would the monopoly earn a higher two-period profit by setting a lower price in the first period? . (round your answer to two decimal places) If a is

Hand written solutions are strictly prohibited

There are two firms in a market, where quantities are the strategic variable within two periods. In each of the two periods t = 1; 2 the inverse demand function Ptis given by P: (y') = 5-y'. The cost function of firm i is given by C=3+2y, where i=1,2. In the first period firm1 is a protected monopolist. Profits of a firm can be interpreted as the sum of its profits in each period. In order to maximize their profits, firms set quantities. Define the monopoly solution. (i) (ii) Firm1 must choose the same quantity in each period y = yf due to the technological restrictions. Considering ył firm2 thinking to enter in period 2. Define the profit maximizing yi if y is given. (iii) Suppose that firm 2 will enter in the second period. What quantity will firm 1 have? What is the equilibrium P, Q and profit?

A monopolist produces a unique product in three different plants, each with its own marginal cost structure. The overall market demand for the product is governed by the demand function = 128 - 8* P,where is the total quantity demanded, and Pis the market price. To meet this demand, the monopolist must decide on the allocation of production quantities Q1, Q2 and Q3 across Plant 1, Plant 2, and Plant 3 respectively. The marginal costs (MC) for producing the good in each plant are as follows: MC₁ = 1, MC₂ = 1 + 2 and MC3Q3. How many units should the monopolist optimally produce in Plant 1 to contribute to the total market demand 62 units O unit 63 units

Economics A market comprises two consumers groups: high- demand types and low-demand types. Assume there are 100 consumers of each type. The high types have demand QH = 14 – Pand low types have demand QL = 12 – P. Assume the marginal (and average) cost is 4 and there are no fixed costs. If the monopolist firm is able to distinguish between the two consumer types and using block pricing to extract maximum profit, how much profit will they earn in total? Select one: а. 9000 b. 6800 С. 8200 d. 7200

Suppose that Brooks, Inc. and Spring, Inc. form a joint venture, River Company, whose utility pumps replace the output sold by the parent companies in the domestic market. Assuming that River Company operates as a monopolist and that its costs equal MC0 = AC0, what is:   (f) Assume River Company’s formation leads to technological advances that yield cost reductions, such that MC1 = AC1. Compared to the original equilibrium (in (a)), what is the net effect of River Company’s formation on welfare? (Calculate the new total surplus (consumer surplus + producer surplus), and take the difference from your answer to (a).) (g) Assume River Company’s formation leads to wage concessions from River Company employees, such that MC1 = AC1. Compared to the original equilibrium, what is the net effect of River Company’s formation on welfare? (h) Assume River Company’s formation leads to changes in work rules that lead to higher worker productivity, such that MC1 = AC1. Compared to the original…

An airline has exclusive landing rights at the local airport. The airline flies one flight per day to New York City with a plane that has a seating capacity of 100. The cost of flying the plane per day is $4,000 + 10q, where q is the number of passengers. The number of seats to New York demanded is q = 165 - .5p and so marginal revenue is 330 - 4q. Assume the airline maximizes monopoly profits. (i) What will be the difference between the marginal cost of flying an extra passenger and the amount the marginal passenger is willing to pay to fly to New York City? (ii) What is the loss of consumer surplus from not filling the plane on each flight? (iii) Would it possible to reduce DWL to zero for this market? Explain