Assume the relationship between the car repair price (SP) and the quantity demanded (q units) is P = 60-q. The total cost of repairing q units for each firm is identical and is expressed by C(q) = 36+q2. Assume that there is only one firm in the market. Thus, we consider the monopoly equilibrium. Obtain the producer surplus in the market.
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- You own a road resurfacing business called Dahyun Bricks services located in Seoul. You are the only reservicing business in South Korea. Therefore, you have a local monopoly. Your experience running the company for many years has taught you that market demand for your service can be described by the demand function: p = 20 - Q. The cost function is c =q². Therefore, marginal cost equals 2q. Quantity refersto square metre of road resurfacing. Note the Q denotes aggregate market demand and q denotes your production. Of course, if you are the only supplier than q = Q. a) Compute profit maximising price and output. Compute profits. b) The monopoly profit that you have been earning has attracted attention from another firm that will set up operations in South Koreaand compete for market share. You are concerned with losing market share and profit. So, you offer the potential entrant the following deal. Both firms agree to maximise industry profits (joint profits). The potential entrant…If a monopoly faces an inverse demand curve of p=450-Q, has a constant marginal and average cost of $30, and can perfectly price discriminate, what is its profit? What are the consumer surplus, welfare, and deadweight loss? How would these results change if the firm were a single-price monopoly? Profit from perfect price discrimination () is $88200. (Enter your response as a whole number.) Corresponding consumer surplus is (enter your response as whole numbers): welfare is and deadweight loss is Profit from single-price profit-maximization is = $44100. (Enter your response as a whole number.) Corresponding consumer surplus is (enter your response as whole numbers): welfare is and deadweight loss is CS = $0 W = $ 88200 DWL = $0. CS = $ 22050 W = $ 66150 DWL = $ 22050Consider the relationship between monopoly pricing and the price elasticity of demand. If demand is inelastic and a monopolist raises its price, quantity would fall by a percentage than the rise in price, causing profit to Therefore, a monopolist will produce a quantity at which the demand curve is elastic. Use the purple segment (diamond symbols) to indicate the portion of the demand curve that is inelastic. (Hint: The answer is related to the marginal- revenue (MR) curve.) Then use the black point (plus symbol) to show the quantity and price that maximizes total revenue (TR). (? 10 Demand Inelastic Demand 6 5 Max TR 3 2 1 -1 -2 Marginal Revenue -3 -4 1 2 3 4 5 7 8 9 10 Quantity
- If a monopoly faces an inverse demand curve of p=330-Q, has a constant marginal and average cost of $90, and can perfectly price discriminate, what is its profit? What are the consumer surplus, welfare, and deadweight loss? How would these results change if the firm were a single-price monopoly? Profit from perfect price discrimination () is $ 28800. (Enter your response as a whole number.) Corresponding consumer surplus is (enter your response as whole numbers): welfare is and deadweight loss is CS=$ W = $ DWL = $ AYou have been granted a monopoly in the avocado market. The market demand for avocados is Q = 2000 – 2P. Your cost structure is such that your total costs are TC = 1000+ 400Q. (limit: whatever needed) What is your profit maximizing price and quantity? Explain this in words and show it graphically. What are the profit, producer surplus and consumer surplus? The government is thinking about breaking your monopoly into ten identical firms and giving ownership to 10 random people. Correspondingly, each firm would have a fixed cost of $1000 and a marginal production cost of $400 per unit. In this perfectly competitive environment, what would be the equilibrium price and quantity? Explain this in words and show it graphically. What are the profit per firm, producer surplus and consumer surplus that correspond to your answer to part d)? How much would you be willing to pay to keep the government from taking your monopoly away? Explain.Mustapha maintains a monopoly in the holographic TV market because of its patent, but it is about to expire. The market demand and Mustapha's production cost are given by: P = 100 -0.50 and TC = 100+ 0.5Q² The market price is decimal place). The market quantity is or decimal place). The monopoly profit is sign, comma or decimal place). (please put your answer in numerical values without any dollar sign, comma or (please put your answer in numerical values without any comma (please put your answer in numerical values without any dollar
- In British Columbia, Canada a company named after Tim Hortons runs a monopoly on a sweet snack called Timbits! Suppose the demand for Timbits is P=90-Q and the cost function is C-Q How much would the consumer surplus, producer surplus and DWL be in case Tim Hortons a single-price monopoly? Suppose Tim Hortons could install a device in its premises that could immediately 11) predict the willingness to pay of every unsuspecting customer entering its franchise premises and charge them that corresponding amount! Additionally, suppose they could also stop resale of products, and thus become a first degree price discriminatıng monopoly. How much would the consumer surplus, producer surplus and DWL be in this case?Question 2 Alice is the monopoly producer for DrinkMeTM, a magical potion that makes you shrink in size. Market demand for this potion is given by p = 60 - 3Q and Alice's costs of production are C(q) = 12g. Please calculate the following quantities. %3D %3D a) Monopoly price, quantity and profits b) The fair market price in perfect competition c) The welfare loss which occurs due to the monopolyYou are the manager of a monopoly, and your demand and cost functions are given by P = 300 – 3Q and C(Q) = 1,500 + 2Q2, respectively. What price-quantity combination maximizes your firm’s profits? Calculate the maximum profits. Is demand elastic, inelastic, or unit elastic at the profit-maximizing price-quantity combination? What price-quantity combination maximizes revenue? Calculate the maximum revenues? Is demand elastic, inelastic, or unit elastic at the revenue-maximizing price-quantity combination?
