Post a New Question

Economics

posted by .

TFC = $1,000
MC = $1 (and constant)
2.Assume that all households have the same demand schedule which is given by the following relationship: P = 10 – 2Q. If there are 400 households in the market, state what the market demand schedule and marginal revenue schedule look like facing the monopolist.
3.Using the information in the item above, find the monopolist’s profit-maximizing output and price
4.Suppose the monopolist is to behave as though it is in a perfectly competitive market. What price would the monopolist charge and how many units of output work it produce? Does the monopolist earn a profit or loss and how much is it?

2) MR = a + 2bQ.

3) Set MR = MC or 10 - 2Q = 1. Solve for Q. This is the profit-maximizing quantity. Sub the answer you get for Q into the demand function to determine the profit-maximizing price.

4) In a perfectly competitive firm, MR = P. Follow steps in #3, but use 10 - 2Q = 1 for MR = MC. Last, use the cost function C = 1000 + 1Q to determine profit or loss.

2) Market demand function is:
P=10 - (2/400)Q = 10-.005Q

3) You could solve 3 in two ways; directly by determining the Marginal Revenue from the Market demand in 2) above, or as Dwane does by maximizing over a single household then multiplying by 400.

BTW, Dwane's MR in #3 is not correct. MR=10-4Q.

4) Dwane is correct

It sure is incorrect...wow! The bad thing is that I wrote the correct formula directly above! It always good to have someone double-check your work!

3) MR= 10-4Q=1
Q=2.25
P=10-.1(2.25)
P=$9.775
Is this what you mean?

OR should you times the answers you get for Q and P by 400?

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Economics

    You should start a new post instead of adding on to an existing post. That said, I would go with A Which of the following statements is true?
  2. statitics

    Approximately 40% of all U.S. households own at least one dog (according to the humane society). Suppose 15 households are randomly selected for a pet ownership survey. a. What is the probability that exactly eight of the households …
  3. economics

    1. Chipo has the following utility function of 2 goods Pies (X) and fanta (Y): U= log X + log Y. (a) show that the consumer maximizes utility subject to the budget constraint. (b) derive the demand functions of good X and good Y. 2. …
  4. economics

    1. Chipo has the following utility function of 2 goods Pies (X) and fanta (Y): U= log X + log Y. (a) show that the consumer maximizes utility subject to the budget constraint. (b) derive the demand functions of good X and good Y. 2. …
  5. economics

    1. Chipo has the following utility function of 2 goods Pies (X) and fanta (Y): U= log X + log Y. (a) show that the consumer maximizes utility subject to the budget constraint. (b) derive the demand functions of good X and good Y. 2. …
  6. Statistics

    I took a large sample of households in a city, and based on that, estimate the standard deviation of the income for all households in the city is $800. In order to make a desired conclusion about the income for all the households in …
  7. Statistics and Probability

    I took a large sample of households in a city, and based on that, estimate the standard deviation of the income for all households in the city is $800. In order to make a desired conclusion about the income for all the households in …
  8. Delta

    According to a previous report, 25% of households had some type of high-speed Internet connection. Suppose 8 households are selected at random and the number of households with high-speed Internet is recorded (a) Find the probability …
  9. Politecnica

    2.   A TV pollster believed that 70% of all TV households would be tuned in to Game 6 of the 1997 NBA Championship series between the Chicago Bulls and the Utah Jazz. A random sample of 500 TV households is selected. TV households …
  10. Math

    In a survey of 380 households regarding the ownership of VCRs and DVD players, the following data was obtained: ​ 350 households own one or more VCRs. ​180 households own one or more VCRs and one or more DVD players. ​13 …

More Similar Questions

Post a New Question