ECON 001 - Consider the following demand curve
Question # 00551843
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Updated on: 06/24/2017 09:34 AM Due on: 06/24/2017
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.
- Consider a single price monopoly. What is the optimal monopoly price?
- What is the economic profit of the monopoly?
- In a perfectly competitive industry such that MC=P (with the same costs and same demand) how much would be produced?
- How much would the monopoly produce if it could perfectly discriminate?
- How much is the economic profit of this perfectly discriminating monopoly?
- In which of the three previous scenarios is producer surplus the highest? 1. a. 2. c. 3. d.
- 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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Solution: ECON 001 - Consider the following demand curve