2) The Epson Company is a monopolist in the market and faces the demand curve shown in thefigure below. The firm's marginal cost curve is MC= 100 +2Q.a. What is the firm's profit-maximizing output and price?Price($/unit)4000D200Quantity of printers(thousand)b. If the firm's demand changes to P = 300 - Q while its marginal cost curve remains the same,what is the firm's profit-maximizing level of output and price? How does this compare to youranswer for (a)?c. Draw a diagram showing these two outcomes. Holding marginal cost equal, how does theshape of the demand curve affect the firm's ability to charge a high price? (bonus question 5points)

Profit maximisation is the level where Marginal revenue and marginal cost curve is equal . this is…

) The Epson Company is a monopolist in the market and faces the demand curve shown in the igure below. The firm's marginal cost curve is MC= 100 + 2Q. -. What is the firm's profit-maximizing output and price? Price ($/unit) 400 0 D 200 Quantity of printers (thousand)

) The Epson Company is a monopolist in the market and faces the demand curve shown in the igure below. The firm's marginal cost curve is MC= 100 + 2Q. -. What is the firm's profit-maximizing output and price? Price ($/unit) 400 0 D 200 Quantity of printers (thousand)

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter11: Price And Output Determination: Monopoly And Dominant Firms

Section: Chapter Questions

Problem 2E: Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by one large...

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Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by one large firmâ€”Tile King. Ajax produces a multiheaded tunnel wall scrubber that is similar to a model produced by Tile King. Ajax decides to charge the same price as Tile King to avoid the possibility of a price war. The pnce charged by Tile King is $20,000. Ajax has the following short-run cost curve: TC=800,0005,000Q+100Q2 Compute the marginal cost curve for Ajax. Given Ajaxs pricing strategy, what is the marginal venue function for Ajax? Compute the profit-maximizing level of output for Ajax. Compute Ajaxs total dollar profits.
Price $11.50 $9.00 $8.00 $5.50 52. Refer to the graph above. If this monopolist were regulated by government agency and forced to set the fair return price, it would likely produce earn charge the price of. and _economic profit a) 300 units; $11.50; negative b) 10002`zunits; $11.50; positive economic profit c) 1,600 units; $8.00; normal d) 1,400 units; $9.00; negative Refer to the graph below: MR 300 1000 1400 1600 Quantity MC AC
Based on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD Demand :P =1000-10Q Total Revenue : TR=1000Q-10Q2 Marginal Revenue: MR=1000-20Q Marginal Cost: MC=100+10Q Where Q indicates the number of copies sold and P is the price in Ectenian dollasrs. a. Find the price and quantity that maximize the company's profit b. Find the price and quantity that would maximize social welfare c. Calculate the deadweight loss from monpoly. d. Suppose in addition to the costs above. the director of the film has to be paid. The company is considering four options i. a flat fee of 2000 Ectenian dollars ii. 50 percent of the profits. iii. 150 Ectenian dollars per unit sold iv. 50 percent of the revenue. For each option, calculate the profit-maximizing price and quantity. Which if any of these compensation schemes would alter the deadweight loss from monopoly. Explain.
Text Problem 24-6 Question Help Currently, a monopolist's profit-maximizing output is 400 units per week. It sells its output at a price of $55 per unit and collects $30 per unit in revenues from the sale of the last unit produced each week. The firm's total costs each week are $8,000. Given this information, the firm's maximized weekly economic profits are $. (Enter your response as a whole number.)
a. b. If a firm's the price elasticity of demand (Eg) to be-3.5 and marginal cost (MC) is $15. Using the mark-up rule, what is the optimal price for the firm to charge? If the price elasticity of demand (En) changes to -3.0, and MC is still $15. Use the mark-up rule to find the new optimal price for the firm to charge? What is the defining feature of a Pure Selling Problem and what impact does it have one the firm's goal to maximize profit?
5. A monopolist with cost function c(Q)=faces an inverse demand function given by P(Q)= √Q' (a) Find the elasticity of demand with respect to price. (b) Assuming that the monopolist uses MR = MC pricing rule, find his profit maximizing price, p", and output level, q". (c) Find the marginal cost at q" and calculate the Lerner index. (d) Does the monopolist's market power depend on his cost curve? In particu- lar, does it depend on a? Is your answer surprising?
The demand schedule of Karachi electric (KE) (known as monopolist) is given as below. You needto find the missing values using TR-TC & MR-MC approaches to analyze its cost of productionand profit maximizing point.Output Price Total Cost Total Revenue MC MR0 Rs.24 Rs.101 21 142 18 203 15 284 12 385 9 50a. Find the missing values of Total Revenue columnb. Find the output level that maximizes the firm's profit, using TR-TC approachc. What price should the firm set to achieve maximum profit?d. Complete the final two columns to verify that the same conclusions are reached using theMR = MC rule.e. Compare both the results and comment on the business and its position
Refer to figure: Profit can always be increased by increasing the level of output by one unit if the monopolist is currently operating at (i)Qo.(i) Q1.(ii) Q2.(iv) Q3. Cost and Revenue(S) Curve C Curve D P, Curve A Curve B Q0, 0, Quartity (iv) only (iii) or (iv) O () or (ii) (1), (ii) or (iii)
The government of a small developing country has granted exclusive rights to Linden Enterprises for the production of plastic syringes. The table below shows the cost and demand data for this government-protected monopolist. Quantity per Day (cases) 1 2 3 $49.0 $42.0 $47.0 $34.5 5 6 7 8 10 Price per Case $16 15 14 13 12 11 10 7 What is the amount of profit that the firm earns? Total Cost $7.00 9.50 11.00 12.00 14.50 17.00 21.00 25.00 30.00 35.50
The SolarFarm powerplant has both fixed and variable costs. As the plant expands production, it first has constant returns to scale, and then diminishing returns to scale.(a) Draw a large graph showing (only) the firm’s marginal costs and average total costs in a suitably labelled graph. Show on the graph where the firm’s technology changes from constant-returns to diminishing-returns.SolarFarm is a monopolist with a downward sloping demand curve. Add to your graph a demand and marginal revenue curve. Assume that the demand curve intercepts the average cost curve at its minimum point. Show the quantity and price of electricity in this market.
The SolarFarm powerplant has both fixed and variable costs. As the plant expands production, it first has constant returns to scale, and then diminishing returns to scale. (a) Draw a large graph showing (only) the firm’s marginal costs and average total costs in a suitably labelled graph. Show on the graph where the firm’s technology changes from constant-returns to diminishing-returns. SolarFarm is a monopolist with a downward sloping demand curve. Add to your graph a demand and marginal revenue curve. Assume that the demand curve intercepts the average cost curve at its minimum point. Show the quantity and price of electricity in this market. (b) The government connects SolarFarm to a nearby town that is currently without electricity. Show in a new, large, graph how the market price and quantity of electricity sold change as a result. (c) Return to the situation in part (a) of this question. The government discovers a new technology that would allow SolarFarm to never experience…
The SolarFarm powerplant has both fixed and variable costs. As the plant expands production, it first has constant returns to scale, and then diminishing returns to scale. (a) Draw a large graph showing (only) the firm’s marginal costs and average total costs in a suitably labelled graph. Show on the graph where the firm’s technology changes from constant-returns to diminishing-returns. SolarFarm is a monopolist with a downward sloping demand curve. Add to your graph a demand and marginal revenue curve. Assume that the demand curve intercepts the average cost curve at its minimum point. Show the quantity and price of electricity in this market. (b) The government connects SolarFarm to a nearby town that is currently without electricity. Show in a new, large, graph how the market price and quantity of electricity sold change as a result. (c) Return to the situation in part (a) of this question. The government discovers a new technology that would allow SolarFarm to never experience…