Problem 1. Market demand is P - 100-0.25Q, where Q is the total quantity demanded by consumers. Monopoly's costs are C - 10Q+0.125Q2 +40. a) Calculate prices and quantities if the monopoly uses block pricing with two prices. Calculate CS, DWL and firm's profit and demonstrate on a diagram. b) Find firm's output and profit if the firm engages in perfect price discrimination. Show on a diagram.
Q: 4. Draw a cash flow diagram with the following characteristics: (a) in years 1 through 5, have an…
A: Meaning of Engineering Economics:The term engineering economics is somewhat different from that of…
Q: i)derive the Total Cost Function, TC(q) ii) draw the Isoquant for the given level of output iii)…
A: Production function : q = 4L + 5K Input prices : w =2 , r = 4 Output level,, r = 4
Q: 41. A man inherited a regular down payment of P200,000 every end of 3 months for 10 years. However,…
A: Future worth in economics means the value of an investment or cash flow at a specific future point…
Q: dentify and explain the various factors that can cause a shift in the supply curve for a specific…
A: Supply refers to the quantity of a specific good or service that producers are willing and able to…
Q: Which one of the following statements is INCORRECT?
A: South African Reserve Bank (SARB), which is the central bank of South Africa, and has its role in…
Q: (Screening Problem) A monopolist decides both the price p and the quality q of the product he sells.…
A: Screening is a method by means of which a single entity acquires and examines details in an attempt…
Q: This question is based on the following diagram. Assume that G and T increase by R100. Z 220 200 AG…
A: Aggregate demand refers to the total demand for commodities and services made by all the economic…
Q: Assume that a consumer can buy only two goods, X and Y, and has an income of $13,000. The price of X…
A: Consumer income (M)= $13,000. Price of good X = $60Price of good Y = $140The budget line shows the…
Q: At what level of output will profits be maximized? Answer:
A: The level of output at which profits are maximized is known as the profit-maximizing level of…
Q: Suppose Scooter's Scooters is currently producing 600 scooters per month in its only factory. Its…
A: Economies of scale is when the increase in production decreases the ATC. Diseconomies of scale is…
Q: You have been asked to evaluate the profitability of building a new distribution center under the…
A: Net present value refers to the present value of all the future cash flows that are adjusted…
Q: Raising the minimum wage has become a national, state, and municipal focus in recent years. The…
A: A minimum wage is the lowest wage per hour that a worker may be paid, as required by federal law. It…
Q: 2. You are the owner of a mine that initially contains a stock of a mineral equal to Ro and you know…
A: Dynamic optimization is a branch of applied mathematics and economics that deals with finding the…
Q: In the figure below, what is the error term for the observation indicated by the arrow (use absolute…
A: The error term is known as residual, It is calculated by subtracting the predicted value from the…
Q: Write an essay discussing what national income is
A: National income is a fundamental economic idea that serves as a key indicator of a country's…
Q: Suppose pq=100 is the demand equation for a manufacturer's product. Let C be the total cost, and…
A: pq is given as 100 The marginal Cost is 0.01q = 200
Q: You're managing a project using the earned value management for cost management. The project planned…
A: The project planned value (PV) is $200,000.The project earned value (EV) is $100,000. The actual…
Q: Buena Vision Clinic is considering an investment that requires an outlay of $600,000 and promises a…
A: Calculate (a) the return of the original investment, (b) the cost of capital and (c) the profit…
Q: 6. Consider the following two stage games, the Prisoner's Dilemma (PD, left) and the Revenge game…
A: (a) Pure Strategy Nash Equilibria (NE) for Prisoner's Dilemma (PD) and Revenge (R):Prisoner's…
Q: A hospital emergency room needs the following numbers of nurses: Day M T W T Min. number 3 8 7 7…
A: The hospital emergency requires the following number of nurses given…
Q: Consider the market for computers. The current price of dell computer is $1200.00. Two consumers,…
A: Total surplus refers to the sum of consumer and producer surplus. Consumer surplus refers to the…
Q: For the Movie “Banking on Bitcoin” answer the following questions. In details, the review report…
A: The setting up of a money market in economics relates to the formation of a market for financial…
Q: (Figure: Aggregate Expenditures Curve II) Use Figure: Aggregate Expenditures Curve II. The…
A: The multiplier in economics is termed as a factor that amplifies the base value of any particular…
Q: A consumer finds only three products, X, Y, and Z, are for sale. The amount of utility yielded by…
A: Marginal Utility (t) = Total utility (t) - Total Utility (t-1) Marginal utility per $ (t) = Marginal…
Q: 1) Using the most recent Occupational Employment Statistics located at the US bureau of labor…
A: Wage growth is the expansion in wages over the long run. It is normally estimated as the rate change…
Q: Suppose that with all exogenous variables, including G and M at their original values, business…
A: Short-run frameworkPrices are constantOutput is demand-determinedExchange rate is…
Q: A twenty year bond with a $1000 face value was issued with a yield to maturity of 4.5% and pays…
A: Given Data,PV = 960.09FV = 1000
Q: An investment makes payments at the end of each year into perpetuity. Assume that the payments…
A: Macaulay Duration: Macaulay duration is used to measure the weighted average time it takes for an…
Q: Consider the following 3×3 two player normal form game that is being repeated infinite number of…
A: - The strategies are as follows:Player 1's strategy: Play 'middle' all the time until the 6th stage,…
Q: The robot manufacturing industry is very reliant to 2 industries. These industries are the computer…
A: P, Q and R are considered as the price for the output for the robot, computer, and hardware that is…
Q: 1. Does monopolistic competition literally require zero profits for all firms? Explain. 2. Do…
A: A market structure characterized by a large number of buyers and sellers, where they offer…
Q: Suppose that will all exogenous variable at their original values, the autonomous part of money…
A: IS curve: IS curve shows different combinations of interest rate and the income. Such that for each…
Q: In order to increase the money supply, the Fed can A) Raise the reserve requirement, increase the…
A: By controlling the money supply and carrying out monetary policy the Federal Reserve sometimes known…
Q: AS1. nticipated in aggre jate AD2. then, according to rational expectations theory, the path for…
A: The rational expectation theory postulates that economic agents have full information about the…
Q: The American Baker’s Association reports that annual sales of bakery goods last year rose 15…
A: Corporate economics is focused on the examination and analysis of corporate finances utilizing…
Q: Archibald Architecture and Erin's Engineers are two firms that are working together to build a new…
A: There are two players : Archibald & Erin Cost of Archibald for a units = a2Cost of Erin of e…
Q: 1. What is the equilibrium value of the net interest rate in the steady state? Enter your answer in…
A: The net interest rate refers to the effective interest rate earned or paid on financial assets or…
Q: Illustrate general equilibrium and the Laffer curve in the context of a repre- sentative consumer…
A: Utility function:
Q: co Be the benefit function B (K) L) -44K +11 KL 2 L, where k is the amount used Capital and the…
A: The benefit equation is given as
Q: The inverse demand for a homogeneous-product Stackelburg duopoly is P=24000-5Q. The cost structures…
A: Stackelberg duopoly is a specific form of oligopoly where there are only two firms (referred to as…
Q: A manufacturer of microwaves has discovered that male shoppers have little value for microwaves and…
A: The manufacturer is following three pricing strategies. It includes a single micro oven with…
Q: Suppose now that in self-service stores there has been an increase in the price of tennis rackets,…
A: Price elasticity of demand measures the responsiveness in quantity demanded of a commodity to a…
Q: Determine whether the following contract described below is worthwhile of undertaking after taxes if…
A: A minimum acceptable rate of return (MARR) is the minimal profit an investor expects to make from an…
Q: Which of the following factors reduce a cartel's ability to cooperate? • All of the other factors…
A: A cartel is a formal or informal organization of independent businesses or companies that join…
Q: 3. A consumer's preferences are represented by the utility function, U(X,Y)= Xay. Budget constraint…
A: The utility function refers to all those commodity bundles that derive the same amount of utility…
Q: Consider the following game played by four individuals, players 1, 2, 3, and 4. Each individual has…
A: Four individuals are playing the game with each individual having over $10000. Each player has the…
Q: words or less Explain how Random Walk Theory makes it difficult for investors to make short run…
A: It can be defined as the theory which is related to the financial decision. This theory shows that…
Q: Please explain the relation between the price and the substitutability of the products in a multi…
A: Disclaimer- “Since you have asked multiple questions, we will solve the first question for you as…
Q: date period In Santa Barbara, the sales tax is 7.55%. What would be the final cost of a surfboard if…
A: It can be defined as the final amount of money a buyer pays to the seller. It encompasses all types…
Q: A firm based in Mexico has found that its growth is restricted by the limited liquidity of the…
A: A capital market is a financial market where long-term obligation or value upheld protections are…
Step by step
Solved in 3 steps with 11 images
- Problem 1. Market demand is P = 100-0.25Q, where Q is the total quantity demanded by consumers. Monopoly's costs are C = 10Q. (10 marks) a) Calculate prices and quantities if the monopoly uses block pricing with two prices. Calculate CS, DWL and firm's profit and demonstrate on a diagram. b) Find firm's output and profit if the firm engages in perfect price discrimination. Show on a diagram. IYou are a consultant who is advising a monopoly on the optimal pricing strategy. Your analysis has yielded the following information. • The marginal cost (MC) is $3. • The demand equation is P = 90 - 3Q . The total cost (TC) is given by 35+ 3Q The marginal revenue (MR) is given by 90 - 6Q Based on this information, answer the following questions. Show FULL calculations! (a) Following the concepts of profit maximization, what is the profit maximizing quantity for this monopoly? (b) Following the concepts of profit maximization, what is the profit maximizing price for this monopoly? (c) Following the concepts of profit maximization, what is the monopoly's profit at the profit maximization point?O OO The above graph shows the market demand function for a product. Assume that the market is served by a perfectly-price-discriminating monopolist with a constant marginal cost of production equal to $4 (MC = $4) and no fixed cost (FC = 0). The deadweight loss equals: DWL - $72 DWL - $0 DWL- -$48 DWL - $84 DWL-$36 $30 $28 $26 $24 $22 $20 Question 23 $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
- Attempts 8. Natural monopoly analysis Keep the Highest / 3 The following graph gives the demand (D) curve for satellite TV services in the fictional town of Streamship Springs. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local satellite TV company, a natural monopolist. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist. PRICE (Dollars per subscription) 100 90 80 70 60 50 40 30 20 10 ATC MC MR 0 0 2 4 6 8 10 12 14 16 18 20 QUANTITY (Number of subscriptions) D + Monopoly Outcome (?) Which of the following statements are true about this natural monopoly? Check all that apply. The satellite TV company must own a scarce resource. In order for a monopoly to exist in this case, the government must have intervened and created it. The satellite TV company is experiencing economies of scale. It is more efficient on the…Don't provide handwritten solution... The figure below depicts the market demand curve a monopoly firm faces. If the monopoly firm successfully practices first-degree price discrimination, the firm's total revenue amounts to ________. $4,000 $10,000 $6,000 $5,0007. A monopoly firm faces a demand curve given by 2(P) = 40 – 2p. The firm has constant MC=$12. (A) Find the firm's marginal revenue and use this to find the firm's profit-maximizing output and price. Draw a diagram. Hint: first figure out how express the firm's total revenue in terms of Q. Then if you know calculus, take the derivative of this expression with respect to Q to find marginal revenue. If you don't know calculus, recall that for a linear demand curve, (1) the slope of the marginal revenue curve is twice (in absolute value) the slope of the demand curve; and (2) the marginal revenue curve intersects the vertical (price) axis at the same point as the demand curve; and (3) the marginal revenue curve hits the quantity axis at half the distance of the demand curve. (B) Find the price elasticity of demand at the profit-maximizing output and price. Is demand elastic?
- Question 4 Think a price making firm (monopolist) with a downward-sloping demand curve is one with a price elasticity of demand equal to-1. This is illustrated in the following diagram. P=AR 20 Expenditure stays the same as price changes TR AR = = Q d (TR) dQ Slope = b/Q 40 100 Diagram 5 Unit elastic demand (Pe=-1) MR = As price and quantity change by the same proportion, total revenue is the same at each price (the TR curve is horizontal). This gives the following TR, AR and MR equations: TR=b b -D (AR) Q = 0 Q As TR is constant at all outputs, so MR must equal zero. In diagram 5, what is the value of b in equation TR=b?Figure 4 Price and cost 0" NO MR MC Demand Q₁ Q₂ 10) Refer to Figure 4. From the monopoly graph above, identify the following: a) The profit maximizing price b) The profit maximizing quantity c) The area representing deadweight loss d) The area representing the transfer of consumer surplus to the monopoly Quantity19. Firm A is monopolist in x market, and it consumes one unit of y in order to produce one unit of x. It costs 5 + py TL to produce one unit of x. (py is the price of product y.) y is produced by a monopolist, B, and it costs 5 TL to produce one unitf of y. The demand for x is defined by px = 50-qx (px product price, qx quantity demanded). a) Assume that px is set by Firm A and py is set by Firm B. What would be the equilibrium prices for products x and y? Calculate Firm A and B's profits. b) Assume that Firms A and B merge together. What would be the equilibrium prices for products x and y? Calculate the profits of the new firm. c) Would the merger between A and B increase the consumer surplus? Why (not)?
- 1. The market demand for monopoly firm is P=300-4Q and the total cost is C(Q)=50Q+Q?+100. a) How many products this firm should produce in order to maximize its profit and at what price? Calculate profit. Show the profit area on a graph. b) Calculate the consumer, producer surplus and the deadweight loss. c) What will happen to the deadweight loss if the demand increases by 10 units and the demand curve shifts to the right? Calculate the profit with new demand function.Assume that builder XYZ is a monopoly in Sydney’s Southwest, who specialises in apartment construction. (a) Draw a diagram to illustrate XYZ making economic profits before the implementation of the hard lockdown in Sydney’s Southwest. On your diagram clearly indicate the quantity XYZ is choosing to produce and the price XYZ is choosing to charge. (b) Assuming costs remain constant and that that the construction industry is still allowed to operate normally, explain the impact of Sydney’s lockdown on builder XYZ’s demand from Q2 part (a). With the aid of a new diagram, discuss XYZ’s static profit or loss situation after these changes. Clearly indicate the quantity XYZ is choosing to produce and the price XYZ is choosing to charge. (c) Assume that XYZ survives the lockdown and stays in business. If the NSW government decides to double the first home buyer’s grant, explain the impact on XYZ’s demand. With the aid of a new diagram, discuss XYZ’s static profit or loss situation after this…A movie production company is planning to make its new movie available online so that it can enjoy monopoly power. Each time the movie is downloaded the production company has to pay 4 taka to the internet service provider. Now it is deciding what price to charge for each download. The numbers below shows the demand schedule for the company, Price per download dollar - 10, 8, 6, 4, 2, 0. Quantity of downloads demands 0, 1, 3, 6, 10, 15. a) Calculate the total revenue and marginal revenue per download. b) To maximize profit what price should be charged and how many downloads would need to be sold?