Reference no: EM13670694
A monopolist faces the following demand function for its product: Q = 45 - 5P The fixed costs of the monopolist are $12 and the variable costs are $5 per unit.
a) What are the profit-maximizing price and quantity? What will be the profits at these price and output levels?
Here Demand function is given by, Q = 45 -5P
ð P =( 45-Q)/5........... (i)
No w Revenue is given by ,
R = Q * P
ð R = Q * ( 45-Q)/5 )..... from (I )
ð R = 9Q-Q^2/5.... (II)
Here Marginal Revenue which is derivative of ( II), so,
MR =9-2Q/5 ..... (iii)
Here marginal cost should be equal to Variable cost which is MC =5
At profit maximization,
MC = MR
ð 9-2Q/5 =5
ð Q = 10
Hence, 10 is the profit maximizing quantity and the price is given from (i) which is 7. The profit is (7*10-12-5*7) =23
b) If the government imposes an annual tax on the firm of $10, what will be the profit-maximizing price, output, and profits? Who bears the burden of the tax? Why?
|
Discuss how to identify good investments
: Describe the characteristics of oligopoly and monopolistic competition. Give an example of product market of oligopoly and monopolistic competition.
|
|
Several measures of central tendency
: several Measures of Central Tendency (averages). We usually use the mean. Where would we use other measures, such as the mode or the median?
|
|
Implement lean systems
: What steps did Versatile take that permitted them to implement Lean Systems and how can a services organization overcome obstacles that might prevent them from adopting Lean System principles?
|
|
Evaluate the financial statements and the financial position
: Evaluate the financial statements and the financial position of health care institutions and describe the overall planning process and the key components of the financial plan.
|
|
Show what are the profit-maximizing price
: What are the profit-maximizing price and quantity and what will be the profits at these price and output levels - what will be the profit-maximizing price, output, and profits? Who bears the burden of the tax? Why?
|
|
Critically analyse the concept of risk
: Critically evaluate the use of complex models of Project Risk and Procurement Management; systematically and creatively making sound judgements based on the systematic analysis
|
|
Compute a one-way anova
: Compute a one-way ANOVA - Determine the observed F value and determine the equation of the least squares regression line to predict y by x.
|
|
Describe a production environment
: Describe a production environment in which MRP would be useful. Describe a production environment in which MRP would not be useful and explain with an example the difference between dependent and independent demand.
|
|
High school students should spend two years in the military
: Steps of persuasion: establishing credibility, acknowledging the audience's position, constructing a rationale, transplanting root elements, and asking for a response.
|