Exam 10: Monopoly

A monopolist with TC = 3q² + q + 12 faces a demand curve of P = 81 - 2q. i)Find the monopoly price and quantity. ii)Find CS and DWL. iii)Find the elasticity of the demand at the monopoly equilibrium.

If p = 20 - y and TC(y)= 8y, then a profit- maximizing monopolist will set a price equal to:

If p = 20 - y and TC(y)= 4y, then when y = 4:

Which of the following is an efficient regulatory mechanism for a monopolistic industry?

A proportional tax on a monopolist's profits will:

If a monopolist's price is twice the marginal cost, the price elasticity of demand is:

A firm is a monopoly if:

In deciding whether to enter a market, a potential entrant takes the output of existing firms as given. This is known as

Monopolies are inefficient for all but which of the following reasons?

Which of the following is not a way to regulate a natural monopoly?

Suppose the price elasticity of demand at the profit maximizing output for a monopolist is - 3. If the monopolist's marginal cost is $6 per unit, what is the profit maximizing price?

Profit maximizing monopolists set their prices:

Consider a monopoly with inverse demand function p = 24 - y and cost function c(y)= 5y² + 4: i)Find the profit maximizing output and price, and calculate the monopolist's profits. ii)Now consider the case in which the monopolist has now another plant with the cost structure c₂(y₂)= 10y₂. How much will the monopolist produce in each plant, what is the price, and the total profits of the monopoly? iii)Now suppose there is a technological change in the first plant and it has the following cost function: c₁ (y₁) = 2y₁. How much will the monopolist produce in each plant and what is the price?

A monopolist is a natural monopolist if a potential entrant faces:

A monopolist faces a demand function given by Q = 50 -P and has a cost function C =3Q²+ 10Q + 50. If the government imposes a lump sum tax of $50, the monopoly price is now greater than the pre- tax monopoly price.

A book vendor can produce a book at a constant MC equal to zero, and its potential buyers have the following reservation prices: $55, $50, $45, $40, $35, $30, $25, $20, $15, $10, $5. If the book vendor must announce a take it or leave it price (i.e., he cannot price discriminate), what price maximizes profits?

A book vendor can produce a book at a constant MC equal to zero, and its potential buyers have the following reservation prices: $55, $50, $45, $40, $35, $30, $25, $20, $15, $10, $5. Suppose the book vendor can identify each buyer's reservation price and is able to set an individual price for each buyer. In order to maximize profits, the monopolist will sell:

A necessary condition for a monopolist to maximize profit is that:

A monopoly publisher either pays an author i)a royalty of x percentage of the revenues from the book, or ii)a lump- sum amount of L dollars. Show how the compensation scheme affects the price the publisher sets and the number of books that the publisher sells.

If MR is greater than MC, a profit maximizing monopolist should: