The diagram below shows the demand, marginal revenue, and marginal cost of a monopolist. 120- $ 110- 100- 90- 80- 70- 60- 50- 40- 30- 20- 10- 0 0 1 2 3 16 4 5 Profit-maximizing output: Profit-maximizing price: $ units MR 6 MC 7 8 a. What price and output would prevail if this firm's product was sold by price-taking firms in a perfectly competitive market? 9 Quantity D 10 11 (11, 0) 14 15 9 5 units b. Determine the profit-maximizing output and price for the monoplist. Price: $ 68 Output: c. Calculate the deadweight loss of this monopoly. $
The diagram below shows the demand, marginal revenue, and marginal cost of a monopolist. 120- $ 110- 100- 90- 80- 70- 60- 50- 40- 30- 20- 10- 0 0 1 2 3 16 4 5 Profit-maximizing output: Profit-maximizing price: $ units MR 6 MC 7 8 a. What price and output would prevail if this firm's product was sold by price-taking firms in a perfectly competitive market? 9 Quantity D 10 11 (11, 0) 14 15 9 5 units b. Determine the profit-maximizing output and price for the monoplist. Price: $ 68 Output: c. Calculate the deadweight loss of this monopoly. $
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.1P
Related questions
Question
Transcribed Image Text:The diagram below shows the demand, marginal revenue, and marginal cost of a monopolist.
120
110-
100-
90-
A
80-
70
60-
50-
40-
30-
20
10
O
@_
0 1 2 3
16
4
Profit-maximizing output:
Profit-maximizing price: $
5
7 units
MR
6
MC
T
7
8
a. What price and output would prevail if this firm's product was sold by price-taking firms in a
perfectly competitive market?
9
Quantity
D
T
10 11 (11, 0) 14 15
b. Determine the profit-maximizing output and price for the monoplist.
Price: $
68
Output:
5 units
c. Calculate the deadweight loss of this monopoly.
Transcribed Image Text:Consider a Bertrand oligopoly consisting of four firms that produce an identical product at a marginal cost of $160. Analysts estimate
that the market demand for this product is P= 400 - 5Q.
a. Determine the equilibrium level of output in the market.
b. Determine the equilibrium market price.
c. Determine the profits of each firm.
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