You are the manager of a monopoly, and your demand and cost functions are given by P = 300 − 3Q and C(Q) = 1,500 + 2Q2, respectively. (LO3, LO4) a. What price–quantity combination maximizes your firm’s profits? b. Calculate the maximum profits. c. Is demand elastic, inelastic, or unit elastic at the profit-maximizing price–quantity combination? d. What price–quantity combination maximizes revenue? e. Calculate the maximum revenues. f. Is demand elastic, inelastic, or unit elastic at the revenue-maximizing price–quantity combination?

Suppose the European Union (EU) was investigated and proposed a merger between two of the largest distillers of premium Scotch liquor. Based on some economists’ definition of the relevant market, the two firms proposing to merge enjoyed a combined market share of about two-thirds, while another firm essentially controlled the remaining share of the market. Additionally, suppose that the (wholesale) market elasticity of demand for Scotch liquor is −1.4 and that it costs $14.80 to produce and distribute each liter of Scotch.Based only on these data, provide quantitative estimates of the likely pre- and postmerger prices in the wholesale market for premium Scotch liquor.Instructions: Do not round intermediate calculations. Enter your final responses rounded to the nearest penny (two decimal places).Pre-merger price: $  Post-merger price: $

"Tiffany" is a retailer monopolist who makes a unique product called the "diamond ring" that requires exactly one diamond as input, which is sold by a wholesaler monopolist, the "Diamond Corporation". Diamond Corporation faces a marginal cost of £60 per unit of input (this is also the firm's average cost). Assume that "Tiffany" faces the following inverse demand curve for diamond rings: Pt 320 – Qt where Pt is the price of red diamond rings in pounds per unit and Qt is the quantity of diamond rings offered for sale by "Tiffany". Similarly, Diamond Corporation charges a price, Pa, for the inputs in £ per unit and Qa is the quantity of inputs sold by Diamond Corporation. a) Derive the profit-maximising price and output for both firms, assuming that the two monopolists act as independent profit-maximising companies. Calculate profits of each firm. Use a clear diagram to illustrate your answers to explain your calculations. b) Now assume that the two firms merge. Calculate the post-merger…

Problem 2: Presently, APlus Transport and Big Movers are the only suppliers of services that haul heavy construction equipment between jobs within the Midwest. No other suppliers have the equipment necessary to perform the service. The market inverse demand for these hauling services is given below. P = 4,030-4Q where P is price per trip and Q is total number of trips per year. For simplicity, also assume that neither firm has fixed costs. From company records, you are given the following variable cost function for each firm: a. C. TVC = 300 TVCB = 80QB b. Calculate the Cournot market equilibrium price-output solutions for each firm including their respective profits. d. Assume these two competitors operate as a two-firm Cournot duopoly. Find the reaction functions for each firm. Suppose Big Movers shuts down operations so that APlus now has a monopoly in this market. What is the price, quantity, and profits for APlus after this change? Summarize the results of your findings over the…