Compute the lerner index for the monopoly described

Assignment Help Business Economics
Reference no: EM1350066

Suppose that the (inverse) market demand curve for a new drug, Adipose-Off, designed to painlessly reduce body fat, is represented by the equation P=100-2Q, where P is the price in dollars per dose and Q is the annual output. (The marginal revenue curve is thus given by the equation MR=100-4Q). Suppose also that there is a single supplier of the drug who faces a marginal cost, as well as average cost, of producing the drug, equal to a constant $20 per dose. What are the monopolist's profit-maximizing output and price? What is the resulting deadweight loss relative to the competitive outcome?

Compute the Lerner Index for the monopoly described in the question above.

 

Reference no: EM1350066

Questions Cloud

Theoretical perspectives on human development : Can you compare three theoretical perspectives on human development? Include any similarities and differences between and among these theories.
Management conflict with the interests of shareholders : Do you think the self interests of management conflict with the interests of shareholders - Self interests of management conflict with the interests of shareholders?
Information about relevant cost analysis : What are the two potential problems in relevant-cost analysis? Give an example of an irrelevant cost. What makes the example irrelevant.
Understanding the international macroeconomy : Understanding the International Macroeconomy, According to the Solow growth model, there are two reasons why an increase in total factor productivity leads to an increase in output. What are those two reasons?
Compute the lerner index for the monopoly described : What is the resulting deadweight loss relative to the competitive outcome. Compute the Lerner Index for the monopoly described in the question above.
How long does it take for the grinding wheel to stop : A stunt pilot performs a circular dive of radius 715m. At the bottom of the dive pilot has a speed of 265 m/s which at that instant is increasing at a rate of 15 m/s2(along the direction of vector B) What total acceleration does the pilot have at ..
Show conflict management styles : Describe conflict characterization, levels of trust, and impediments to resolving the conflict.
Management planning and control cycle : Determine which of the following activities is not part of the management planning and control cycle:
Conditions associated with aging : Can you explain two problems and/or conditions associated with aging? Then identify and describe strategies that can be used to mitigate the impact of these conditions or improve the problems/conditions you described.

Reviews

Write a Review

 

Business Economics Questions & Answers

  Explain with the concept of optimization

Explain with the concept of optimization and a graph, the circumstances under which a waste site could be made "too clean".

  Illustrate what quantity does lin produce

At a market price of $50 a batch, illustrate what quantity does Lin's produce also what is the firm's economic profit in the short run.

  Different time frames for the short run

Provide examples of two industries with different time frames for the short run. Clarify why this is the case.

  If the countries split the market evenly

If the countries split the market evenly, Illustrate what would be South Africa's production also profit

  Converse briefly its relationship to microeconomics

Converse briefly its relationship to microeconomics also other related fields of study such as finance, marketplace also statistics.

  Equilibrium price and quantity

A machine used to cereal boxes dispenses, on the average, ounces per box. What is the largest value.

  The average consumer income

The average consumer income is $20,000, and the price of the related good is $1.10. Compute the predicted quantity demanded of X at these prices and income.

  Which of the subsequent represents a positive macroeconomic

Which of the subsequent represents a positive macroeconomic statement. Assume the United States can produce Toyotas at the cost.

  Organizational structure of your selected organization

Describe the organizational structure of your selected organization. Evaluate and difference that structure with two different organizational structures.

  Illustrate what effect do rising interest rates have value

Illustrate what effect do rising interest rates have on the value of the Australian dollar. Use an AD/AS diagram to show the effects on Real GDP and the price level of an appreciating Australian dollar.

  Price elasticity of demand for royal crown cola

The price elasticity of demand for Royal Crown Cola is equal to the price elasticity of demand for soft drinks in general It is invalid to make inter product elasticity comparison

  Maximum amount you will pay for the new process

Illustrate what is the maximum amount you will pay for the new process. Suppose that the new process must pay for itself by the end of the first year.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd