Economics

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?

  1. 👍 0
  2. 👎 0
  3. 👁 124
asked by Pete

Respond to this Question

First Name

Your Response

Similar Questions

  1. Managerial Economics

    5. Call Us demand function is Q = 20 – 0.2P and the MC = 10 + 5Q. Given that TFC = $2,000; a) Derive an equation for the TC. b) Calculate the profit at the profit maximizing level.

    asked by Hydie on November 9, 2010
  2. 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

    asked by Kal Jay on October 28, 2016
  3. ecomonics

    I am trying to understand the math part of supply and demand . I am not getting it,I really need help! The question is: The demand and supply functions for sweatshirts are as follows: DEMAND Supply Quanity Quanity demanded(per

    asked by elizabeth on November 5, 2008
  4. Econ

    Coca-Cola in dispensers located on a golf course sells for $1.25 a can, and golfers buy 1,000 cans. Assume the course raises the price to $1.26 (assume a penny raise is possible) and sales fall to 992 cans. a. Using the midpoint

    asked by Linda on November 8, 2012
  5. Economics

    Call Us demand function is Q=410-P and MC=10+5Q. Given that TFC=$0 a)derive an equation for TC b)calculate the profit maximizing level

    asked by Special on November 14, 2009
  6. pre Calc

    Assume the number of U.S. dial-up Internet households stood at 38.5 million at the beginning of 2004 and was projected to decline at the rate of 3.5 million households per year for the next 9 years. (a) Find a linear function f

    asked by Terry on January 4, 2017
  7. 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.

    asked by hass on December 30, 2012
  8. 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.

    asked by hass on December 30, 2012
  9. 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.

    asked by hass on December 30, 2012
  10. Economics

    The table below shows annual demand (in 1,000,000 units per year) for Widgets. Use this information to calculate a constant growth forecasting model. Use your growth model to forecast demand for the years 1995 and 2000. Year

    asked by Andrew on November 29, 2006

More Similar Questions