Question: 1.Consider a demand function for a monopolist is P = 25 - 0.25Q; total costs are TC = 10 + 5Q + 0.2Q^2 ; marginal

1.Consider a demand function for a monopolist is P = 25 - 0.25Q; total costs are TC = 10 + 5Q + 0.2Q^2 ; marginal revenue is MR = 15 - 2Q; and marginal cost is MC = 5 + 0.5Q.

Answer the following questions

i)What is the profit-maximizing rate of output and price?

ii)Calculate the monopolist welfare loss (WL), where WL=1/2*1/n ;and n represent price elasticity of demand

iii)Use the Lerner index to determine if market power exists

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

1.Consider ademand function for a monopolist is P =25- 0.25Q; total costs are TC =10+5Q + 0.2Q2; marginal revenue is MR =15-2Q; and marginal cost is MC =5+ 0.5Q.Answer the following questions. a)What...

ECON 3310 1.Which of the following situations would cause a decrease in supply in the market for computers? a.The price of computer chips, an input to produce computers, increases b.The price of...

I. Which of the following is correct? a) The pivot of the budget line shows the substitution effect while a slope gives the income effect. b) The pivot of the budget line shows the substitution...

1.Which of the following situations would cause a decrease in supply in the market for computers? a.The price of computer chips, an input to produce computers, increases b.The price of computers...

Question 1 (10 points) Imagine that you have been given a job as an economic advisor to evaluate a certain competitive US manufacturing industry. Your (accurate) statistical analysis indicates the...

1.Suppose when the price of Apples is $7.75, the price of Bananas is $12.50, and the budget is $72. If Apples are on the x-axis and Bananas are on the y-axis, what is the slope of the Indifference...

Question 1 Imagine that you have been given a job as an economic advisor to evaluate a certain competitive US manufacturing industry. Your (accurate) statistical analysis indicates the market is...

please use the attachment to answer all of the questions. please bold answers. Only one rm produces and sells soccer balls in the country of Wiknam, and as the story begins, international trade in...

Consider the firm discussed in Problem 23-13. If the firm were to produce the 12th unit and thereby incur hourly total costs of $65, what would be its marginal cost? Based on this answer and your...

The waveform for the current in a 50-?F initially uncharged capacitor is shown in figure. Determine the waveform for the capacitor voltage. i(t) (mA) 10 o 10 20 30 40 50 t (ms) -10

A 10.0-mL sample of potassium iodide solution was analyzed by adding an excess of silver nitrate solution to produce silver iodide crystals, ( which were filtered out of the solution) and potassium...

Come up with the merge and merge _ sort functions with racket code using the picture for reference and answer problem # 2 .

Introduction Coca - Cola is one of the world s most recognized brands, known for its strong emotional connection with consumers. Founded in 1 8 8 6 , the company has continuously evolved its...

1. What information of vital importance is not expressed in the message? The answer to the question tells us a little about the code used between the parties.

2. Find five metaphors for communication.

5. Starting with a motive you may have for acting the way you do in a particular situation: a) What purpose did you seek to achieve? b) Which aspects of your past and your surroundings influenced...