Micro Economics For Today
Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
Question
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Chapter 9, Problem 9SQ
To determine

 The profit maximizing price of the monopolist.

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A monopolist has a constant marginal cost of 12. Consumers' inverse demand is P = 32 - 4Q. The monopolist runs a persuasive advertising campaign that costs 26 and increases consumer demand to P = 37 - 4Q. (a) What is the gain (or loss) in the firms profits caused by the advertising campaign?  b) When consumers' pre-advertising preferences are used to calculate welfare, what is the welfare gain (or loss) caused by the advertising campaign? Answer 2 Question 1 (c) When consumers' post-advertising preferences are used to calculate welfare, what is the welfare gain (or loss) caused by the advertising campaign? Answer 3 Question 1
Consider the revenue and cost conditions for a monopolist that are depicted in the figure.a) If price exceeds AVC, what is this producer's profit-maximizing (or loss-minimizing) output?b) What are the firm 's economic profits (or losses)?
A monopolist is deciding how to allocate output between two geographically separated markets​ (East Coast and​ Midwest). Demand and marginal revenue for the two markets​ are:   P1=20−Q1                MR1=20−2Q1 P2=30−2Q2              MR2=30−4Q2   The​ monopolist's total cost is C=5+5(Q1+Q2).   What are​ price, output,​ profits, marginal​ revenues, and deadweight loss if the monopolist can price​ discriminate?  ​(round all answers to two decimal​ places) In market​ 1, the price is $_____ and the quantity is _____ In market​ 2, the price is $______and the quantity is______
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