Derive the monopolists marginal cost and average cost

Assignment Help Business Economics

Reference no: EM131392265

A monopolist has costs C(Q) = 5Q. It has one consumer whose inverse demand is P = 35-Q.

a. Derive the monopolist’s marginal cost and average cost. Graph the demand and marginal cost curve.

b. Derive the profit maximizing output, price, profit and consumer surplus when the firm cannot price discriminate. You may leave the expressions unsimplified.

c. Is the monopolist efficient? If not calculate the welfare lost (a.k.a., dead weight loss).

d. Given the price in part b., derive the profit-maximizing fixed fee the monopolist could charge. Explain why this is the fee.

Reference no: EM131392265

Questions Cloud

Administration were medicare and medicaid programs created : During which Presidential administration were the Medicare and Medicaid programs created? The ACA mandates that employers that offer dependent coverage must cover children up to what age? Under the new federal insurance market regulations governing e..

Identify factors use to compute present and future cash flow : FIN/571- Identify the factors used to calculate present and future cash flows. Distinguish between the annual percentage rate and effective annual rate, and how each is used in financial decision making.

Find the half-life of the radionuclide : The activity R of a sample of an unknown radionuclide is measured at hourly intervals. The results, in MBq, are 80.5, 36.2, 16.3, 7.3, and 3.3. Find the half-life of the radionuclide

Derive the equilibrium outputs : There are two firms (firm A and firm B). Both have zero costs. They SIMULTANEOUSLY choose quantities: Q_A and Q_B. The inverse demand is P = 18 – Q, where Q = Q_A + Q_B. Derive the equilibrium outputs. No points for solving for the Stackleberg/sequen..

Derive the monopolists marginal cost and average cost : A monopolist has costs C(Q) = 5Q. It has one consumer whose inverse demand is P = 35-Q. Derive the monopolist’s marginal cost and average cost. Graph the demand and marginal cost curve.

Derive the average a buyer is willing to pay for a used car : There is a used car market with equal number of good and bad cars. There are two buyers and two sellers. The buyers are willing to pay $12,000 for a good car and $8000 for a bad car. However, the buyers do not know which seller has the good car. Deri..

What is the condition for efficiency in production : Consider a country in autarky with only two inputs, capital (K) and labor (L), that produces only two goods X and Y. What is the condition for efficiency in production (allocation of inputs) What are the two other conditions necessary for this econom..

What is percentage change in price of bond sam and bond dave : If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam and Bond Dave? (Negative amounts should be indicated by a minus sign.

Understanding of effective leadership : Someone who is developing an understanding of effective leadership has many different styles and skills from which to choose. Discuss the importance of understanding these approaches to leadership during the process of leadership development.

User Account

All Pages