Suppose the inverse demand for a monopolist’s product is given by P = 70-0.5Q. The monopolist can produce output in two plants. The marginal coat of producing in plant 1 is MC1 = 3Q1 and the marginal cost of producing in plant 2 is MC2 = Q2. How much output should be produce in each plat to maximize profit? And what price should be charged? Compare to perfect competition, monopolist charged higher price and supply less quantity with long run firm equilibrium. Discuss using suitable graph. Explain the deadweight loss of monopolization
Suppose the inverse demand for a monopolist’s product is given by P = 70-0.5Q. The monopolist can produce output in two plants. The marginal coat of producing in plant 1 is MC1 = 3Q1 and the marginal cost of producing in plant 2 is MC2 = Q2. How much output should be produce in each plat to maximize profit? And what price should be charged? Compare to perfect competition, monopolist charged higher price and supply less quantity with long run firm equilibrium. Discuss using suitable graph. Explain the deadweight loss of monopolization
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter9: Monopoly
Section: Chapter Questions
Problem 19SQ
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Suppose the inverse demand for a monopolist’s product is given by P = 70-0.5Q. The monopolist
can produce output in two plants. The marginal coat of producing in plant 1 is MC1 = 3Q1 and the
marginal cost of producing in plant 2 is MC2 = Q2. How much output should be produce in each
plat to maximize profit? And what price should be charged?
Compare to
long run firm equilibrium. Discuss using suitable graph.
Explain the
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