The inverse demand curve is given by and a monopolisthas a fixed supply of 4 units of a good available. How much will it sell and what price will it set? What would be the price and output in a competitive market with these demand and supply characteristics? What would happen if the monopolist had 6 units of the good available? (Assume free disposal.)
To determine the monopolist's selling price and quantity, we need the inverse demand curve. However, you have not provided the equation for the inverse demand curve. Please provide the equation, and I will be able to assist you further.
In the absence of the inverse demand curve, we cannot provide specific answers to the questions about the monopolist's selling price and quantity or the price and output in a competitive market.
However, I can explain the general approach to solving these questions:
1. Monopolist's Selling Price and Quantity:
By using the inverse demand curve equation and the monopolist's fixed supply of 4 units, we can find the quantity at which the monopolist maximizes profit. This occurs where marginal revenue (MR) equals marginal cost (MC). Once the optimal quantity is determined, you can substitute it back into the inverse demand curve to find the corresponding selling price.
2. Price and Output in a Competitive Market:
In a competitive market, the price and output are determined by the intersection of the demand and supply curves. With the given demand and supply characteristics, you would need the equation for the demand curve to find the price and the quantity exchanged in the market.
3. Monopolist with 6 Units Available:
If the monopolist had 6 units available instead of 4, the optimal quantity at which the monopolist maximizes profit would likely change. By applying the same approach as previously described, you can find the new quantity and corresponding selling price.
Remember to take into account any other assumptions or specific information given in your question when calculating the answers.