Question 2 only

QQ = 40 - 2P and Q, = 25.5 - 0.75P and Q. = 36.5-1.25P a) Derive the market demand function from the above individual demand curves. (4 marks) b) Explain 'Giffen Paradox' and the Veblen effect. Do they follow the law of demand in their case? Question 2 a) A monopoly has the following total cost function and demand function. Price (in Qty demanded (units) Total Cost (in dollars) dollars) 8 5 20 7 6 21 6 7 22 5 8 23 4 9 24 3 10 25 i) Find the Marginal cost and marginal revenue for this monopolist at every level of output (5 marks) ii) What output will the monopolist produce? (3 marks) i) Find the appropriate price that will be charged by the monopolist. (3 marks) iv) Explain using a well labelled diagram the long run equilibrium for the monopolist. (5 marks) V) Explain the relationship between average revenue, marginal revenue and price elasticity of demand under the conditions of monopoly. Your explanation should include be accompanied by a diagram. (9 marks) Question 3 Consider a monopolist whose price is expressed by the equation P= 200-20q. The Total Cost (TC) is expressed by the equation TC= 145+30q. a) Find the Total Revenue (TR) equation (3 marks) b) Consider that this monopolist can produce quantities of a good from 0 to 8 units. (i.e. 0,1,2,3,4,5,6,7,8).Over this range, i) Calculate the prices at every level of production (4 marks) ii) Calculate the total revenue at every level of production. Calculate the Total Cost at every level of production Calculate the marginal Revenue at every level of production (6 marks) iii) Calculate the Total Profit at every level of production (4 marks) c) The demand equation of a good is given by the expression P+2Q = 20 and the Total Cost function is Q'-8Q-+20Q+2. i) Find the level of output, which maximizes Total Revenue (4 marks) Find the maximum profit (4 marks) Question 4 O A monopolist faces a demand curve p = 100 -2q whose Marginal cost function is given as