Monopoly worksheet microeconomics PDF

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monopoly microeconomics...

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A monopolist has total cost 𝑇𝐶(𝑄) = 2 𝑄2 and faces demand Q=12-P. Find the quantity it produces, the price it charges, the profit it makes and the amount of deadweight loss it causes. Step 1: Find MR (using inverse demand) and MC and equate to find optimal Q

Step 2: Plug optimal Q into demand to find P

Step 3: Construct profit function and plug in P and Q

Step 4: Use graph to find DWL

A monopolist has total cost 𝑇𝐶(𝑄) = 1 + 2𝑄 + 𝑄 2 and faces demand Q=10-2P. Find the quantity it produces, the price it charges, the profit it makes and the amount of deadweight loss it causes. Step 1: Find MR (using inverse demand) and MC and equate to find optimal Q

Step 2: Plug optimal Q into demand to find P

Step 3: Construct profit function and plug in P and Q

Step 4: Use graph to find DWL

Q=40-(1/3)P TC1 = 5 + 10Q1 + 10Q12

TC2 = 10 + 60Q2 + (5/2)Q22

What is the cartel’s optimal total quantity and price, and division of output across firms? Step 1: Aggregate MC horizontally to find MCT. (Hint: Use Q1+Q2=QT and MC1=MC2=MCT)

Step 2: Find MR (using inverse demand) and equate with MCT to find optimal QT

Step 3: Plug QT into demand to find optimal P

Step 4: To find Q1 and Q2, plug QT into MCT, then use MC1=MC2=MCT, then use expressions for MC1 and MC2 from Step 1....