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- Problem 3 uppose an airline has monopoly over a certain route. The estimated price elasticity of demand for business travelers is E-12, while the price elasticity of demand for leisure travelers is Ey-24. The airline wants to set the prices separately for business and vacation travelers. Economy Firat Class Only i the marginal cost of transporting each passenger is the same, und the airline is able to separate the two groups perfoctly, what is the optimal surcharge (in ) on business travelers? Oor example. fleiture travelers pay 100, and business ravelers pay 200, then the surcharge is 100%) Anvwer b) Suppose that in order to separste business travelen, the airline must offer them slightly better conditions on board (for enample, serve them a meal). As a resul, the marginal cost of flying a basiness traveler is 30% higher than for a leivare traveler. What is the optimal surcharge (in ) on business fravelers in this case? Awwer Now suppose the airline introdaces a Basi Economy fare,…T/F There are alot of firms (seller) in a monopoly market. Justify in detail.E3 A monopolist faces market demand Q = 500 - 10 P, and has a marginal cost curve equal to MC = Q/10 - 10. I have computed the marginal revenue curve fro you which is given by MR = 50 - Q/5. If the firm is a single price monopolist, find the profit maximizing price and quantity and the resulting profit to the monopoly.What is the socially optimal price and quantity? What is the firm's profit at this price and quantity?Show (1) and (2) on a graph.Calculate consumer surplus (CS) and producer surplus (PS) and total surplus for parts (1) and (2). Show CS, PS, and DWL on the graph. Calculate the DWL due to monopoly.If the firm engages in first degree price discrimination, find the profit maximizing quantity and the resulting profit to the monopoly.Between (1) and (5), which pricing scheme is preferred by the monopolist and which by the consumers? why?
- Economics only answer from "regulated price, p" to the end. thank you very much in advance. II A monopolist facos an inverse demand curve given byP 300-30 R han constant marginal cont of 30. What is the proft-maximizing price and quantity What is the mnonopolist's profits? (Aanume the monopolist han zero fxnd conts.) (You may wish to to display your results in a graph) Price = Quantity= Profit = What is the Consumors' Surplun (cs? CS- What in the Deadweight Loss? DWL Assume this is a regulated monopoly and that the regulator winhes to maximize CS without driving the monopolist out of buniness. What price coiling would the regulator choose? Regulated prioe, p'-, At p', recaloulate Consumers Surplus Recalculate profit: Profit' Recalculate DWL'- Who wins as a result of the new regulated price? (Circle one) Consumers Monopolist Both win Neither wins Who loses as a result of the new regulated price?Price Quant ity Total Cost 2.000 1.600 1,800 2. 1,800 1,600 2000 For the Monopolist find the TR when the 3rd output is produced. Selected Answer: 2.000 Question 5 Total Cost 1.600 1.800 2.000 Price Quantity 2.000 1,800 1,600 What would be the profit for the monopolist if he choose to produce 2 units of the good? Selected Answer: 1,600 Question 9 If TR= 2+3Q^2, then MR is:Suppose that global dem and for the rabies shots is gi ven by: Q = 36 – 6 * P where Q is the dem and in billions of units. Suppo se further that the firm DOGGO holds a pa tent on the only effective rabies shot. DOGGO’s total cost function (in billi ons of dollars) for produ cing Q shot doses is: C = 5 + 3 * Q Assuming that the patent grants DOGGO a monopoly on the global rabies shots market: How many doses will DOGGO choose to produce? At what price will DOGGO sell its shots?
- Why are urban areas willing to subsidize urban transit systems? Does the argument for subsidies make sense to you?Classify the following as a government-enforced barrier to entry, a banker to entry that is not government-enforced, or a situation that does not involve a barrier to entry. A patented invention A popular but easily copied restaurant recipe An industry where economies of scale are very small compared to the size of demand in the market A well-established reputation for slashing prices in response to new entry A well-respected brand name that has been carefully built up over many yearsWhat is the usual shape of a marginal revenue cuwe for a monopolist? Why?
- A monopolist decision about how many unitys to sell is it macro micro decison? explain whyFigure: A Profit-Matimizing Monopoly Firm Price, marginal revenue, marginal cost, average total cost $35 ATC 29 26 160 220 250 300 Quantity of output per week) (Pipure. A Protin-Maximining Monopoly Finn) The profin-miing fiem in this fipre will prodace A) 160 B) 220 C) 250 D) 300 its of ourput per week (Pigure: A Profit-Masimining Monopoly Finm) This profit-matimining monopoly fimi's cost per unit at its profintinizing quantity is A) 38. B) $15. C) $16. D) $18. (Pigure: A Profie-Macimining Monopoly Fim) This profit-maximizing monopoly firmts price per unit is A) $20. B) $26 C) $29. D) $35. (Figure. A Profit-Marimining Monopoly Fim) This profn-matimizing monopoly firm's profit per unit is: A) $5. B) $13. C) $14. D) $20.The dogram at the age shows the demand carve, god revenue curve, and cost curvat for a monopolist that owns the only golf courses on Eage hland The monopolist's products 18-hole golf gemees 8. What is the prot manung pece and output number of rounds of got per week) for the monopolist on Eagle land? The prott mauming outpat (number of rounds of golf per week) for the monopolist on Eagle and 80 rounds (Round your response to the nearest whole number) (Round your The prott maxing price for the monopoled on Eagle Blandis response to the post dotar D Price (dollars per round of golf) 250- 225- 200- 175- 150- 125- 100- 75- 50- 25- 0 20 MC ATC D EMR 40 60 80 100 120 140 160 180 200 Quantity (rounds of golf per week)
