Question
1A monopolist with constant average and marginal cost equal to 8 ( AC = MC = 8) faces demand Q = 100 - P ,
1A monopolist with constant average and marginal cost equal to 8 (AC = MC = 8) faces demand Q = 100 - P, implying that its marginal revenue is MR = 100 - 2Q.Its profit maximizing quantity is
a. 8
b. 46
c. 50
d. 92
2Consider the same monopoly situation as in the previous question.The monopoly price is
a. 8
b. 46
c. 54
d. 92
3Consider the same monopoly situation as in the previous question.The deadweight loss associated with this monopoly is
a. 966
b. 1,058
c. 2,484
d. 3,680
4A monopolist has total cost TC = .1Q2 - 2Q + 100 and marginal cost MC = .2Q - 2.Market demand is Q = 86 - P, implying that the firm's marginal revenue is MR = 86 - 2Q.Its profit-maximizing output is
a. 92
b. 46
c. 40
d. 20
5.Consider the same monopoly situation as in the previous question. The firm's profit will be
a. 1,760
b. 1,660
c. 2,264
d. 6,728
6.Consider the same monopoly situation as in the previous question.The deadweight loss (compared to a single firm behaving as if it were perfectly competitive) is about
a. 667
b. 333
c. 1,000
d. 1,333
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