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Monopoly Market Questions




Question;1. A monopoly faces demand given by Q = 200 ? P. The marginal cost MC = $10 isconstant. The marginal revenue MR = 200 ? 2Q.a. Graphically show the monopoly?s equilibrium.b. What is the equilibrium price and quantity?c. What are the profits earned by the monopolist?d. Suppose the government forces the monopolist to behave like a Competitive firm.What will be equilibrium price and quantity now? What will be the firm?s profits?2. Assume the Market Demand is given by Q = 300-2P, and MC=AC=30. Computethe price, quantity, consumer surplus, profits, and DWL under the following marketstructures:a) Perfect competitionb) Monopolyc) Perfectly price discriminating monopoly


Paper#57140 | Written in 18-Jul-2015

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