A monopolist with total cost 80 - 20Q + Q and marginal cost MC = 2Q...

 

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A monopolist with total cost 80 - 20Q + Q² and marginal cost MC = 2Q - 20 faces average revenue (demand) P = 1000 - Q and hence marginal revenue MR = 1000 - 20 (a) Calculate the price that the monopolist will charge and the quantity of output. (b) Assume that the government sets a price ceiling at the competitive price. Calculate (i) the quantity supplied by the monopolist (ii) the monopolist's profit. (c) Calculate the deadweight loss from monopoly power in (a). (d) Now, assume that the government had set a price ceiling of $730. (i) Calculate the quantity supplied by the monopolist. (ii) Calculate the monopolist's profit. (iii) Is the total (consumer plus producer) surplus greater or smaller than in (b)? [You do not need to calculate it.] (e) Now, assume that the government had set a price ceiling of $600. (i) Calculate the quantity supplied by the monopolist. (ii) Calculate the monopolist's profit. (iii) Is the total (consumer plus producer) surplus greater or smaller than in (b)? [You do not need to calculate it.] A monopolist with total cost 80 - 20Q + Q² and marginal cost MC = 2Q - 20 faces average revenue (demand) P = 1000 - Q and hence marginal revenue MR = 1000 - 20 (a) Calculate the price that the monopolist will charge and the quantity of output. (b) Assume that the government sets a price ceiling at the competitive price. Calculate (i) the quantity supplied by the monopolist (ii) the monopolist's profit. (c) Calculate the deadweight loss from monopoly power in (a). (d) Now, assume that the government had set a price ceiling of $730. (i) Calculate the quantity supplied by the monopolist. (ii) Calculate the monopolist's profit. (iii) Is the total (consumer plus producer) surplus greater or smaller than in (b)? [You do not need to calculate it.] (e) Now, assume that the government had set a price ceiling of $600. (i) Calculate the quantity supplied by the monopolist. (ii) Calculate the monopolist's profit. (iii) Is the total (consumer plus producer) surplus greater or smaller than in (b)? [You do not need to calculate it.]

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a To find the profitmaximizing quantity TR PQ 1000 QQ TC 80 20Q Q2 TR T... View the full answer