ECON 001 - Consider the following demand curve

Question # 00551843 Posted By: dr.tony Updated on: 06/24/2017 09:34 AM Due on: 06/24/2017
Subject Economics Topic Microeconomics Tutorials:
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Consider the following demand curve: P = 24 – Qd , which implies that MR= 24 – 2Qd.

Now consider a monopoly with TC and MC given, respectively, by TC = Q2 + 36,

MC = 2Q,

where Q is the quantity supplied by the monopolist.

  1. Consider a single price monopoly. What is the optimal monopoly price?
  2. What is the economic profit of the monopoly?
  3. In a perfectly competitive industry such that MC=P (with the same costs and same demand) how much would be produced?
  4. How much would the monopoly produce if it could perfectly discriminate?
  5. How much is the economic profit of this perfectly discriminating monopoly?
  6. In which of the three previous scenarios is producer surplus the highest? 1. a. 2. c. 3. d.
  7. The government wants to increase efficiency in the single price monopoly case. At what price should the government set the price ceiling?


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  1. Tutorial # 00549155 Posted By: dr.tony Posted on: 06/24/2017 09:34 AM
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