a) Monopoly

Let's say the cost function and the demand function of a monopolistic firm are as follows, TC=100+Q^2, and P=20-Q. What is the

price and output this monopolistic firm produces?

a ) P=15, Q=5

b) P=10, Q=5

C) P=15, Q=7.5

b) Following demand and TC curve from Question 5 (TC=100+Q^2, P=20-0). What would be the price and quantity if this monopolist

was mandated by regulation to set its price as a perfect competitor?

P=40/3, Q=20/3

P=20/3, Q=40/3

P=80/3, Q=40/3

c) First degree price discrimination

A monopolist has the following demand curve and total cost functions

P=30-Q

C=Q^2+100

What is the price and quantity does this monopolist sets under first degree price discrimination?

P-20 for all units, Q=10

P=20 for last unit only, Q=10

) P=22.5 for all units, Q=7.5

d) P=22.5 for last unit only, Q=7.5

d) Third degree price discrimination

There are two types of consumers and the monopolist

can tell them apart. Q1 represents the demand function for the entire group

1 and Q2 represents the demand function for the entire group 2

Q_1=300-10P_1

Q_2=100-5P_2

The total cost function is

TC=1000+100

What price does this firm charge to each group if the firm is able to charge them separate prices?

P1=275, P2=125

Pl=20, P2=15

C)P1=100, P2=25

e) Following question 8, what if there was a government intervention that prohibited the monopolist in question 8 to charge

different prices? That is, if the monopolist in question 8 had charge the same price to everyone, what would be the price they

would charge?

Q_1=300-10P_1

Q_2=100-5P_2

P=275/15

P=125

) P=275

f) Let the demand and supply curve of a perfectly competitive industry be as follows,

Q_s=80+2P

Q_d=100-3P

What is the market price? And how much does each firm produce if there are four firms?

P=8, Q=88

P=4, Q=88

) P=4, Q=22