Question: A monopoly has a demand function of P=15-Q ($) and total cost function ofTC= 7Q ($) a. What is price and optimal quantity that gives

A monopoly has a demand function of P=15-Q ($) and total cost function ofTC= 7Q ($)

a. What is price and optimal quantity that gives the firm maximum profit? Using Lerner indicator (L) to identify market power of this firm?

b. What is price and optimal quantity for society (for perfect competitive market)? Identify dead-weight loss (DL) created by this firm?

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!

Q:

What are the three product costs for a manufacturing company? Describe each.

Q:

Problem 2: A firm has demand function of P=100-Q ($) and total cost function of TC=500+ 4Q+Q2 ($). a. Is this firm a perfect competitive firm? Why? b. What is price and quantity to maximize total...

Q:

A firm has demand function of P=100-Q ($) and total cost function of TC=500+ 4Q+Q 2 ($). a. Is this firm a perfect competitive firm? Why? b. What is price and quantity to maximize total revenue ?...

Q:

Billboards are provided in a market run by a monopoly, ClarityStream. Thedemand for billboards is P = 1600 20QD. a. Calculate the function for ClarityStreams marginal revenue. b. Calculate marginal...

Q:

4. Suppose the sellers from the previous problem, Han and Lando, decide to collude as a single monopolist instead of competing with one another. They still face a demand curve given by P=150-Q, where...

Q:

As in the prescribed book, we use the comma ( , ) to separate thousands, and the full stop ( . ) as a decimal point. ANSWER THE QUESTIONS AS DIRECTLY AS POSSIBLE AND EXPLAIN YOUR ANSWERS. ALL...

Q:

O (PC - PP) x QE Zoom out (PC - PP) x (QE - Q") x Question 3(Multiple Choice Worth 1 points) (03.02 MC) Use the graph to answer the question that follows. Price MC ATC ATC, Quantity (units) The shift...

Q:

Well explained answers will be of help Final Exam (Group A) You have 2h to complete the exam. The final consists of 6 questions (15+10+15+25+20+15=100). Problem 1. (Choice with Cobb-Douglas...

Q:

Answer this questions by providing the corect answers. (a) Using the numbers in the graph, identify each of the following. (i) The profit-maximizing output quantity (ii) The profit-maximizing price...

Q:

Answer the followings questions showing step-by-step procedure. \fmarginal cost coincides across plants. Intuitively, this indicates that the monopolist does not have further incentives to move...

Q:

Exercise 1: For the production function from the previous homework: y=KL Assume that the firm is in the long run (so you can use the long-run cost function you found in the previous homework) to...

Q:

5 pt A railroad cart with a mass of m = 13.4 t is at rest at the top of an h = 11.8 m high hump yard hill. m m, h After it is pushed very slowly over the edge, it starts to roll down. At the bottom...

Q:

An air-ambulance service in Colorado is interested in keeping its helicopter in a central location that would minimize the flight distance to four major ski resorts. An X-Y grid was laid over a map...

Q:

Which of the following is the accounting equation? Assets = Liabilities + Net income Revenue - Expenses = Net income Assets + Liabilities = Stockholders' equity Assets = Liabilities + Stockholders'...

Q:

16) A sequential circuit with two JK flip-flops A and B, and one input X specified by the input equations described below. What are the next states of the flip-flops A and B if the present state of...

Q:

At time t = 0, the initial log values of the variables L, Y, and M are: Table 1 Inl InY InM 9t Australia 1 1 What's more, the continuous growth rate of real income g, and of the money supply , are:...

Q:

Question-5) [Total 20 points] A homogen trapezoid with total mass of M having dimensions of hight L and sides length 2a and 2b [uniform mass density is M O = = constant] is placed in x y plane as...

Q:

2. Review the performance report for the MBA program at Hidden Gem University provided in Exhibit A. The Dean made a claim that the MBA program enrollment is up by 20%. Comparing actual to budgeted...

Q:

Business format franchises are prevalent in which of the following businesses? Business services. Lodging. Real estate. All of the above. Automotive

Q:

The quality of the proposed ideas

Q:

The number of new ideas that emerge

Q:

7. Develop a circular model, with positive and negative feedback loops, showing the following critical variables: