4) If a perfectly competitive market gets monopolized, the monopoly's average cost and marginal cost are...

 

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4) If a perfectly competitive market gets monopolized, the monopoly's average cost and marginal cost are constant and both equal to 50, and the monopoly faces a market demand curve given by Q = 500 -0.2P: a) How many units of will the monopoly produce if it is seeking to maximize profit? Support your answer with calculations. b) Compute the price the monopoly will charge per unit. Support your answer with calculations. c) Based on your answer from the previous question, compute the profit the monopoly makes. Support your answer with calculations. d) e) If the market would have not been monopolized and it would have remained a perfectly competitive market, what would be the equilibrium quantity and price? Based on your answer from the previous question, which market would maximize total surplus? Briefly explain why. 4) If a perfectly competitive market gets monopolized, the monopoly's average cost and marginal cost are constant and both equal to 50, and the monopoly faces a market demand curve given by Q = 500 -0.2P: a) How many units of will the monopoly produce if it is seeking to maximize profit? Support your answer with calculations. b) Compute the price the monopoly will charge per unit. Support your answer with calculations. c) Based on your answer from the previous question, compute the profit the monopoly makes. Support your answer with calculations. d) e) If the market would have not been monopolized and it would have remained a perfectly competitive market, what would be the equilibrium quantity and price? Based on your answer from the previous question, which market would maximize total surplus? Briefly explain why.

Answer rating: 100% (QA)

AC MC 50 8 50002 P C 2P 5008 P 250058 Pg ... View the full answer