Question
1.Amonopolyhasaninversedemandfunctiongivenbyp=4804Qandaconstantmarginalcostof40.Calculatethedeadweightlossifthemonopolychargestheprofitmaximizingprice. 2.BetaLaundry'scostfunctionisC(q)=50+10q+2q2. A.WhatquantitymaximizesBeta'sprofitifthemarketpriceisp?Howmuchdoesitproduceifp=$70? B.Ifthegovernmentimposesaspecifictaxoft=$4,whatquantitymaximizesBeta'saftertaxprofit?Doesitoperateorshutdown? 3.Amonopoly'sinversedemandfunctionisp=1602Q,andithasnofixedcost.Initially,itsmarginalcostis12.Now,thefirmmakesaprocess innovationthatreducesitsmarginalcostto4.Determinetheprice,quantity,consumersurplus,profit,totalsurplus,anddeadweightlossbeforeand aftertheinnovation.Whatshareoftheincreasedtotalsurplusgoestoconsumers?
1.Amonopolyhasaninversedemandfunctiongivenbyp=4804Qandaconstantmarginalcostof40.Calculatethedeadweightlossifthemonopolychargestheprofitmaximizingprice.
2.BetaLaundry'scostfunctionisC(q)=50+10q+2q2.
A.WhatquantitymaximizesBeta'sprofitifthemarketpriceisp?Howmuchdoesitproduceifp=$70?
B.Ifthegovernmentimposesaspecifictaxoft=$4,whatquantitymaximizesBeta'saftertaxprofit?Doesitoperateorshutdown?
3.Amonopoly'sinversedemandfunctionisp=1602Q,andithasnofixedcost.Initially,itsmarginalcostis12.Now,thefirmmakesaprocess
innovationthatreducesitsmarginalcostto4.Determinetheprice,quantity,consumersurplus,profit,totalsurplus,anddeadweightlossbeforeand
aftertheinnovation.Whatshareoftheincreasedtotalsurplusgoestoconsumers?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
