Suppose a firm engaged in the illegal copying of DVD’s has a daily short run total cost function given by: STC = (q^2)+25 If pirated DVD’s sell for $20, how many will the firm copy each day? What will its profits be? What is the firm’s short run producer surplus at P=20? Develop a general expression for this firm’s producer surplus as a function of the price of pirated DVD’s.

Suppose a firm engaged in the illegal copying of DVD’s has a daily short run total cost function given by: STC = (q^2)+25 If pirated DVD’s sell for $20, how many will the firm copy each day? What will its profits be? What is the firm’s short run producer surplus at P=20? Develop a general expression for this firm’s producer surplus as a function of the price of pirated DVD’s.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter25: Monopoly

Section: Chapter Questions

Problem 9E

See similar textbooks

Similar questions

The inverse demand for tea is given by P= 10 – 0.04Q, where Pis the price per a gram of tea and Qis the total number of grams of tea brought to market. There are two tea shops in the market. Shop 1's cost function is given by C = 0.01q,?, where qı is the number of grams of tea it brings to market. Shop 2's cost function is given by C2 = 0.01q2², where qp is the number of grams of tea it brings to market. Given that the two shops compete by setting output (Cournot), answer the following. a) Identify shop 1's reaction function to shop 2's output to within 2 decimal places (e.g. 0.33). 91= Number - Number 92 b) Identify shop 2's reaction function to shop 1's output to within 2 decimal places (e.g. 0.71). q2= Number Number 91 c) To within two decimal places (e.g. 0.63) what is the equilibrium output level of each shop and the equilibrium per gram price for tea. Shop 1 will produce Number grams of tea and shop 2 will produce Number grams of tea. The equilibrium market price is £ Number
The inverse demand for tea is given by P = 8 – 0.03Q, where Pis the price per a gram of tea and Q is the total number of grams of tea brought to market. There are two tea shops in the market. Shop 1's cost function is given by C = 0.02q,?, where q, is the number of grams of tea it brings to market. Shop 2's cost function is given by C2 = 0.02q22, where q2 is the number of grams of tea it brings to %3D %3D market. Given that the two shops compete by setting output (Cournot), answer the following. a) Identify shop 1's reaction function to shop 2's output to within 2 decimal places (e.g. 0.33). 91= Number Number 92 b) Identify shop 2's reaction function to shop 1's output to within 2 decimal places (e.g. 0.71). q2= Number Number 91 c) To within two decimal places (e.g. 0.63) what is the equilibrium output level of each shop and the equilibrium per gram price for tea. Shop 1 will produce Number grams of tea and shop 2 will produce Number grams of tea. The equilibrium market price is £…
Jesaki Inc. is trying to enter the widget market. The research department established the following price-demand, cost, and revenue functions: p(x) = 60 - 1.20x C(x) = 210 + 12x R(x) = xp(x) = x(60 - 1.20x) Revenue function Price-demand function Cost function where x is in thousands of widgets and C(x) and R(x) are in thousands of dollars. The price p(x) is the price in dollars of one widget when the demand is a thousand widgets. All three functions have domain 1 ≤ x ≤ 50. Use this information to answer questions 1-10 below.
A startup software company has indicated its cost, c(x), and revenue, f(x), as given below, such that x is the number of lines of programing code (units in 1000 lines). c(x) = 80000 - 2(x-200)2 f(x) = (x-10)3 + (x+10)2 Find the marginal cost analytically, and draw its graph Find the marginal revenue analytically, and draw its graph Solve for the x point where marginal cost is equal to marginal revenue analytically. Comment why is this point significant analytically. Write the profit function and draw its graph Is the profit function concave up or concave down?
A boutique chocolate manufacturer produces 2 types of chocolate, Dark chocolate, and Milk chocolate daily with a total cost function: TC = 7D + D x M + 3M where: D is the quantity of the Dark chocolate (in kgs) and M is the quantity of the Milk chocolate (in kgs). The prices that can be charged are determined by supply and demand forces and are influenced by the quantities of each type of chocolate according to the following equations: PD = 20-D + 5M for the price (in dollars per kg) of the Dark chocolate and PM 23 + 3D - M for the price (in dollars per kg) of the Milk chocolate. The total revenue is given by the equation: TR = PD XD + PM × M and the profit given by the equation Profit = TR-TC First, use a substitution of the price variables to express the profit in terms of D and M only. Using the method of Lagrange Multipliers find the maximum profit when total production (quantity) is restricted to 2023 kgs. Note D or M need not be whole numbers. Be sure to show that your solution…
A flour mill buys its wheat from two different farms, then processes the wheat into flour. Wheat from Farm X costs the mill $7 per bushel, and wheat from Farm Y costs the mill $15 per bushel. The selling price (in dollars per bushel) for the mill's wheat can be modeled by p(x, y) = 500 x y where x is the demand for the flour milled from Farm X's wheat and y is the demand for flour milled from Farm Y's wheat. Assume that x and y may be zero (so the mill only buys from one of the suppliers) and that the mill can by 1/2 of a bushel. Then the maximum profit is attained when x = y = bushels bushels The amount of the flour mill's maximum profit is $
A firm's demand function is Q = 16 -P and its total cost function is defined as TC = 3 + Q+ 0.25Q² Use these two functions to form the firm's profit function and then determine the level of output that yields the profit maximum. What is the level of profit at the optimum?
Giocattolo is a profit-maximizing firm producing toy cars, which it can produce and sell in its home country, Italy, and abroad in Spain. The average cost (AC) curve on the following graph represents Giocattolo's cost of producing toy cars within one factory, whether in Italy or in Spain. COST (Dollars per toy car) 10 1 0 10 I 1 20 30 40 50 60 70 80 QUANTITY (Thousands of toy cars) AC 90 100 Suppose that at the current market price of toy cars, the demand for Giocattolo's product is 10,000 toy cars per year in Italy and 20,000 toy cars per year in Spain. (Hint: Select each point on the previous graph to see its coordinates.) (?) Based on Giocattolo's average cost curve, within one factory it can produce 20,000 toy cars at S per toy car, and produce the total of 30,000 toy cars at S per toy car. Complete the following table by indicating Giocattolo's total production cost for each scenario. Total Production Cost (Dollars) Scenario Produce 10,000 toy cars in Italy and 20,000 toy cars in…
Would a cost function of 0 mean a linear line of supply curve? For example if 10 firms are on the market selling 10 goods and the cost function is 0?
On the graph input tool, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 6, 12, 15, 18, 24, and 30 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green points (triangle symbol) to plot the results. Calculate the total revenue if the firm produces 6 versus 5 units. Then, calculate the marginal revenue of the sixth unit produced. The marginal revenue of the sixth unit produced is________. Calculate the total revenue if the firm produces 12 versus 11 units. Then, calculate the marginal revenue of the 12th unit produced. The marginal revenue of the 12th unit produced is_________.
Let's say jacky has a demand function for a product made in Ney york city given that the function D(q)=-1.15q+270, where q is the number of items in demand and D(q) is the price per item, in dollars, that can be charged when q units are sold. Say that the fixed costs of production for the item is $5,000 and variable costs are $10 per item produced. If 100 items are produced and sold, what are the finds :
Joshua owns a small boat and catches lobster off the coast of Maine. His weekly cost function is TC(q) = 40 + 5q + 5q?. He sells his lobsters to the local wholesaler at the market price p (in dollars). a) Find Joshua's short-run supply function for lobsters. (Hit: In this case short-run marginal cost is the same as long-run marginal cost.) b) Find Joshua's long-run supply function for lobsters. c) Find Joshua's shutdown price and Joshua's breakeven price (the price at which profit equals zero). d) Suppose the market price is $30, calculate his profit. What will Joshua do in the long run? Explain. 1