Exam 17: Monopoly

Suppose a monopoly firm has an annual demand function of Q^d = 20,000 - 250P,annual variable costs of VC = 16Q + 0.002Q² and marginal cost of MC = 16 + 0.004Q,where Q is the annual quantity of output.In addition,the firm has an avoidable fixed cost of $25,000 per year.If this firm maximizes its profit,what is the value of the consumer surplus in the market?

The Solo Coal Mine is the only employer in the small town of Way out there.The market supply of coal miners is Q^s = 0.02W - 400 and Q^d = 500 - 0.02W,where W is the annual wage of a coal miner and Q is the number of coal miners.What is the profit maximizing number of coal miners for the coal mine to hire?

A monopoly market is:

Suppose Kate's Great Crete (KGC)has annual variable costs of VC = 30Q + 0.0025Q² and marginal costs of MC = 30 + 0.005Q,where Q is the number of cubic yards of concrete it produces per year.In addition,it has an avoidable fixed cost of $50,000 per year.KGC's demand function is Q^d = 20,000 - 400P.What is the profit maximizing sales quantity?

The Solo Coal Mine is the only employer in the small town of Way out there.The market supply of coal miners is Q^s = 0.02W - 200,where W is the annual wage of a coal miner and Q is the number of people who would accept employment as a coal miner.What is the inverse supply function for coal miners?

An oligopoly market is:

Suppose a firm has a variable cost function VC = 20Q with avoidable fixed cost of $50,000.For regulators,the first-best regulated price is ______; the second-best regulated price is ____.

The Solo Coal Mine is the only employer in the small town of Way out there.The market supply of coal miners is Q^s = 0.02W - 400,where W is the annual wage of a coal miner and Q is the number of people who would accept employment as a coal miner.What is the coal mine's marginal expenditure function?

A monopolist's profit maximizing price depends upon:

A market is a natural monopoly when:

A firm's Lerner Index:

A monopsony market:

Suppose a multi-product monopolist sells two complementary goods,A and B. Annual market demand for good A is Q^d_A = 600 - 25P_A - 12P_B. Each time a consumer buys A, his demand for B is Q^d_B = 4 - 0.4P_B. The marginal cost of good A is a constant $4, and the marginal cost of good B is a constant $0.50. Suppose the price of good B is $5. If the monopolist considers the effect of additional sales of A on the sales of good B, how many units of good A will it produce?

A firm has market power:

The Solo Coal Mine is the only employer in the small town of Way out there.The market supply of miners is Q^s = 0.02W - 200 and Q^d = 500 - 0.02W,where W is the annual wage of a coal miner and Q is the number of coal miners.What is the profit maximizing number of coal miners for the coal mine to hire?

The Solo Coal Mine is the only employer in the small town of Way out there.The market supply of coal miners is Q^s = 0.02W - 400,where W is the annual wage of a coal miner and Q is the number of people who would accept employment as a coal miner.What is the coal mine's marginal expenditure when it hires 150 coal miners?

The Solo Coal Mine is the only employer in the small town of Way out there.The market supply of coal miners is Q^s = 0.02W - 200,where W is the annual wage of a coal miner and Q is the number of people who would accept employment as a coal miner.What is the coal mine's marginal expenditure when it hires 150 coal miners?

A loss leader:

Suppose a firm has a variable cost function VC = 20Q with avoidable fixed cost of $50,000.What kind of firm is this?

Suppose a multi-product monopolist sells two complementary goods,A and B. Annual market demand for good A is Q^d_A = 600 - 25P_A - 12P_B. Each time a consumer buys A, his demand for B is Q^d_B = 4 - 0.4P_B. The marginal cost of good A is a constant $4, and the marginal cost of good B is a constant $0.50. Suppose the price of good B is $5. What is the effective marginal cost of selling a unit of good A?