There is a monopolist manufacturer (e.g the car maker) in the wholesale market with the marginal cost at 40, MCM = 40 ( no fixed costs), and a monopolist retailer (e.g., the car dealer) in the retail market with the retail demand equation, p = 360-q. And they work separately from each other. First the manufacturer sets the wholesale price, w, in the wholesale market; second after observing the wholesale price w, the retailer will decide the retail price, p, in the retail market. Suppose now the manufacturer and the retailer still work separately from each other. Design a franchise contract so that (1) together they can achieve the total profit as in the integration case (Part II) and (2) it will make the manufacturer's profit triple the retailer's profit, i.e., \pi M = 3\pi R. (Q2 E). How to design this franchise contract?

How does the demand curve perceived by a monopolist compare with the market demand curve?

Many schemes for price discrintination involve somecosL For example, discount coupons take up the timeand resources of both the buyer and the seller. Thisquestion considers the implications of costly pricediscrimination. To keep things simple, let's assumethat our monopolist's production costs arc simplyproportional to output so that average total cost andmarginal cost arc constant and equal to each other.CHAPTER 15 MONOPOLY 317a. Draw the cost., demand, and marginal-revenuecurves for the monopolist. Show the pricethe monopolist would charge without pricediscrimination.b. ln your diagram, mark the area equal to the mernopolist's prolit and call it X. Mark the area equalto consumer surplus and call it Y. Mark the areaequal to the deadweight loss and call it Z.c. Now suppose that the monopolist can perfectlyprice discriminate. What is the monopolist'sprofit? (Give your answer in terms of X, Y, and Z.)d. What is the change in the monopolist's prolit fromprice discrimination? What is the…

Suppose firm A is currently the only firm in a market and thus currently behaving as a monopolist. Themarket demand is given as:Q = 100 -P, where Q is the market quantity and P is the marketprice. Now, firm B is contemplatingenteringthe market. Further, A and Bhave total costs that are zero at al %3D suppose lout put levels. Note: A's and B's quantities produced are denoted QA and QB, respectively. [1]In the pre-entry period (i.e., when A is a monopolist), A would most desire to price the þroductat: A.$100 B.$75 C.$50 D.$25

Many schemes for price discrimination involvesome cost. For example, discount coupons take upthe time and resources of both the buyer and theseller. This question considers the implications ofcostly price discrimination. To keep things simple,let’s assume that our monopolist’s production costsare simply proportional to output so that averagetotal cost and marginal cost are constant and equalto each other.a. Draw the cost, demand, and marginal-revenuecurves for the monopolist. Show the pricethe monopolist would charge without pricediscrimination.b. In your diagram, mark the area equal to themonopolist’s profit and call it X. Mark thearea equal to consumer surplus and call it Y.Mark the area equal to the deadweight loss andcall it Z.c. Now suppose that the monopolist can perfectlyprice discriminate. What is the monopolist’sprofit? (Give your answer in terms of X, Y,and Z.)d. What is the change in the monopolist’s profit fromprice discrimination? What is the change in totalsurplus from…

I need ans 3 In the next two problems, (1) and (2), consider a monopolist that maximizes profits and charges all consumers the same price. The inverse demand function is P = 100 – Q, where P is the price and Q is output. Calculate the deadweight loss to consumers (if any) and to the monopolist (if any). (1) Marginal cost is always zero. (2) Marginal cost is MC = Q. (3) Assume that every consumer has the inverse demand function P = 10 – Q and that marginal cost is always zero. There are 10 consumers. The monopolist wants to maximize profits by designing a two-part tariff. Calculate the two parts of the tariff, and calculate profits.

Suppose that at the current level of production, the price of a monopolist's product is equal to $37.50 per unit. Marginal revenueis equal to $10 per unit, and marginal cost is equal to $5 per unit. This monopoly Choose one: A cir increase its profit by producing and selling more units of its product. B. should set price equal to marginal revenue. C. can increase its profit by producing and selling fewer units of its product. O D. has maximized profit and should keep production the same.

A social cost is applied to the monopolist market structure. Why does thisoccur? If the gains producers achieve from being a monopolist are provided toconsumers, would the social cost of the monopolist be eliminated?

MR 1434) ETS MC Demand WHO The graph refers to a market served by two firms, each face the marginal cost (MC) curve shown in the diagram. The marginal revenue curve (MR) that a monopolist would face in this market is also shown If the firms are able to collude successfully. O the total output will be 2 unuts and the price will be $6,00 per unit O the total output will be 4 units and the price will be 16.00 per unit the total output will be 2 units and the price will be $8.00 per unit Othere will be no deadweight loss

A monopolist can sell three products, labelled A, B and C. All products are produced at the constant unit cost of SEK 10. There are three buyer types, whose WTPs are reported in Table 1. Show Transcribed Text # of buyers 30 40 30 Products TABLE 1 A B с 70 50 30 50 40 40 30 30 50 2.1. Suppose that the monopolist wishes to bundle product A with exactly one be- tween product B and product C. Which would be the most profitable of these two bundles? Is bundling the two products included in it actually more profitable than selling the products separately? 2.2. Can you provide an intuitive account for the ranking of the profitability of the two bundles established in 2.1? Show Transcribed Text Answer to Problem 2. Part 1. The profits from the two bundles are TAB= 4900 and 7AC = 6000. Hence, A should be bundled with C. The profit from the optimal bundle is greater than the sum of the profits realised by selling the two products independently, which is equal to TA + TC = 4900 (= πA + 7B). Part…