ECON 212 Quiz: ECON 212quizquiz5b.f03

17 views3 pages

turquoisegnu128

31 Jan 2019

School

Department

Course

Professor

For unlimited access to Study Guides, a Grade+ subscription is required.

lukej76 and 39015 others unlocked

ECON 212 Full Course Notes

Verified Note

32 documents

Document Summary

Section b: [2 marks] suppose a monopolist faces demand marginal cost of . To find the profit-maximizing price, set mr mc= P: [3 marks] a homogeneous products duopoly faces a market demand function given by. Derive the equations of each firm"s reaction curve. Both firms have a constant marginal cost of. Since the marginal costs are the same for both firms, symmetry implies the reaction function for firm 2 is, solved for the cournot equilibrium. In equilibrium, because of symmetry both firms will choose the same level of output. [5 marks] two players, player 1 and player 2, are playing a game with three possible strategies, small, medium, and large. Profits for each possible outcome are shown in the following table. A nash equilibrium occurs when each player is making the best choice given the choice of the other player.

Related Questions

3. A monopolist has two sets of customers. The inverse demand for Group 1 is described by P1 = 200 - Q1. For Group 2, the inverse demand is P2 = 100- Q2. The monopolist faces ca constant marginal cost of 40. Let Q be the aggregate quantity demanded.

a. (10 points) Show that the monopolist's total demand if the two markets are treated as one is: Q=0; P =200

Q=200-P;100<P =200
Q=300-2P;0<P = 100
b. (10 points) Show that the monopolist's profit-maximizing price is P = 95 if both groups are to be charged the same price. At this price, how much is sold to members of Group 1 and how much

to members of Group 2? What is the consumer surplus of each group? What are the total profits?

4. Now suppose that the monopolist in problem #3 can separate the two groups and charge separate, profit-maximizing prices to each group.

a. (10 points) What will these prices be? What is consumer surplus? What are the total profits?
b. (10 points) If the total surplus is consumer surplus plus profit, how has price discrimination affected total surplus?

purplehound509

The table below presents the demand schedule and marginal costs facing a monopolist producer.

Q	P($)	TR($)	MR($)	MC($)
0	8			-
1	7			1
2	6			2
3	5			3
4	4			4
5	3			5
6	2			6
7	1			7
8	0			8

Instructions: Round your answers to the nearest whole number and include a negative sign if appropriate. Leave no cells blank. Enter 0 if appropriate.

a. Fill in the total revenue and marginal revenue columns.

b. What is the profit-maximizing level of output?

c. What price will the monopolist charge for the quantity in part (b)?

whiteoyster220

1. Which of the following is true under a monopoly?

A. Monopolist chooses the highest possible price.
B. Monopolist chooses a price that is always higher than marginal cost of production.
C. Marginal revenue of a monopolist is price.
D. None of the above are true for monopoly.

2. You are the manager of a monopoly that faces a demand curve described by P = 230 -20Q. Your costs are C = 5 +30Q. The profit-maximizing output for your firm is:

A. 4
B. 5
C. 6
D. 7

3. Which of the following is true?

A. A monopolist produces on the inelastic portion of its demand.
B. A monopolist always earns an economic profit.
C. The more inelastic the demand, the closer marginal revenue is to price.
D. In the short run a monopoly will shutdown if P < AVC.

4. In a competitive industry with identical firms, long rum equilibrium is characterized by:

A. P = AC
B. P = MC
C. MR = MC
D. All of the above

5. You are the manager of a firm that sells its product in a competitive market at a price of $50. Your firm's cost function is C = 40 + 5Q². Your firm's maximum profits are:

A. 125
B. 250
C. 100
D. 85

6. A perfectly competitive firm faces:

A. A perfectly elastic demand function
B. A perfectly inelastic demand function
C. a demand function with unitary elasticity
D. none of the above

purpleworm770

ECON 212 Quiz: ECON 212quizquiz5b.f03

ECON 212 Full Course Notes

Document Summary

Get access

Related textbook solutions

Principles of Economics

Principles of Macroeconomics

Principles of Microeconomics

Related Documents

ECON 212 Quiz: ECON 212quizquiz5c.w04

ECON 212 Quiz: ECON 212quizquiz5d.w04

ECON 212 Quiz: ECON 212quizquiz5b.w06

Related Questions