Essay
A monopolist has total production costs given by 0.5 Q2. The demand function in the "home" market is P = 20 -
0.5 Q
a)If the monopolist sells all its output to the home market, what is the equilibrium price and quantity?
b)Now suppose the monopolist has a choice between the home market and a foreign market in which the monopolist can sell any amount Q at a price of $12. Will the monopolist sell in the foreign market? If yes, what would happen to the price the monopolist charges in the home market?
Correct Answer:
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a)p = 15;
b)Yes, the monopoly ...View Answer
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Correct Answer:
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b)Yes, the monopoly ...
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