A monopoly profit-maximizes by selling 700 tables each hour. At this level of production, it has marginal revenue of $40, average revenue of $50, marginal cost of $40 and average total cost of $42. What is the monopoly's profit-maximizing price assuming they are not price discriminating?
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- How can a monopolist identify the profit-maximizing level of output if it knows its total revenue and total cost curves?Suppose you operate in a monopoly environment and you set your price inorder to achieve maximum pro ts. Is your demand elastic, unitary elastic, or inelastic? Does your answer change if you were in a monopolistically competitive market? What happens to the elasticity when you go from a monopolistic market to a monopolistically competitive one? Explain and give an example. Retailer companies sell many products for which manufacturers have a sug-gested retail price printed on the package. Is there an economic reason for this price? If you are the manager of a retailing outlet, what factors will determine whether you should charge the suggested retail price or some higher or lower price?You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Analysts at your firm have determined that group 1's elasticity of demand is -6, while group 2's is -2. Your marginal cost of producing the product is $80. a. Determine your optimal markups and prices under third-degree price discrimination. Instructions: Enter your responses rounded to two decimal places. Markup for group 1: Price for group 1: $ Markup for group 2: Price for group 2: $ b. Which of the following are necessary conditions for third-degree price discrimination to enhance profits. Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click twice to empty the box. There are two different groups with different (and identifiable) elasticities of demand. Check We are able to prevent resale between the groups. At least one group has…
- Price $100 90 80 70 60 50 40 Quantity Average Total Cost 1 2 3 4 5 6 7 $100 63 52.67 49.50 49.60 50 52.29 TC TR Refer to the above data for a monopoly (Table 4). This monopoly firm will maximize its profit by producing: MR (Quantity) MC Note: Round to the nearest whole number ‒‒‒‒‒‒ Refer to the above data for a monopoly (Table 4). At its profit-maximizing output, this monopoly's total profit will be:Only typed answer Using the information in the "Botox Revisited" application, determine how much Allergan loses by being a single-price monopoly rather than a perfectly price-discriminating monopoly. Assume there are no fixed costs. By not price discriminating, Allergan loses $____million per year. (Round your answer to the nearest million.)You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Analysts at your firm have determined that group 1's elasticity of demand is -6, while group 2's is -4. Your marginal cost of producing the product is $50. a. Determine your optimal markups and prices under third-degree price discrimination. Instructions: Enter your responses rounded to two decimal places. Markup for group 1: Price for group 1:$ Markup for group 2: Price for group 2: $ b. Which of the following are necessary conditions for third-degree price discrimination to enhance profits. Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click twice to empty the box. We are able to prevent resele between the groups. At least one group has elasticity of demand less than one in absolute value. There are two different groups with different…
- You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Analysts at your firm have determined that group 1’s elasticity of demand is −6, while group 2’s is −2. Your marginal cost of producing the product is $80. a. Determine your optimal markups and prices under third-degree price discrimination. markup for group 1: price for group 1: markup for group 2: price for group 2:Only typed answer If a monopoly faces an inverse demand curve of p= 210−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 dead weightloss? How would these results change if the firm were a single-price monopoly? Profit from perfect price discrimination (π) is $ _____ (Enter your response as a whole number.)According to the figure below, what is the maximum profit of this monopoly? Hint: don't forget to subtract total cost from total revenue. Price ($) 18 16 14 12 10 8 6 4 42 $60 $80 $240 $-120 MC1 АТС1 AVC1 MR₁ 10 20 30 40 50 60 70 80 90 Quantity
- You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Group 1’s elasticity of demand is -4, while group 2’s is -5. Your marginal cost of producing the product is $60.a. Determine your optimal markups and prices under third-degree price discrimination. Instructions: Enter your responses rounded to two decimal places.Markup for group 1: Price for group 1: $ Markup for group 2: Price for group 2: $ b. Which of the following are necessary conditions for third-degree price discrimination to enhance profits.Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click twice to empty the box. At least one group has elasticity of demand greater than 1 in absolute value.unanswered At least one group has elasticity of demand less than one in absolute value.unanswered We are able to prevent resale…Exercise 5. You are the manager for a monopoly with costs, demand, and marginal revenueas in the graph at the top on Figure 1.a. Does the fact that you operate in a monopoly always guarantee that you can achievehigher profits by increasing the price? Explain.b. Draw the area representing the profits on the top graph on Figure 1.c. Suppose one of your suppliers just announced an increase in prices for a specific partthat your product requires. What should the impact be to each of the curves on thetop graph of Figure 1? Explain carefully.d. Suppose economic conditions change in such a way that the demand curve for yourcompany shifts left.i. Draw a demand curve on the bottom graph on Figure 1 that leads to zero economicprofits.ii. Draw a demand curve on the bottom graph on Figure 1 such that any furtherleftward demand shift will cause you to shutdown.You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Analysts at your firm have determined that group 1’s elasticity of demand is −3, while group 2’s is −2. Your marginal cost of producing the product is $70.a. Determine your optimal markups and prices under third-degree price discrimination.Markup for group 1: Price for group 1: $ Markup for group 2: Price for group 2: $ b. Which of the following are necessary conditions for third-degree price discrimination to enhance profits. check all that apply At least one group has elasticity of demand less than one in absolute value. We are able to prevent resale between the groups. At least one group has elasticity of demand greater than 1 in absolute value. There are two different groups with different (and identifiable) elasticities of demand.
