d. 5 The inverse demand curve for a monopolist changes from P = 100-2Q to P-120-
ID: 1115618 • Letter: D
Question
d. 5 The inverse demand curve for a monopolist changes from P = 100-2Q to P-120-20, while the marginal cost of production remains unchanged at a constant $20 change in the demand curve, the profit-maximizing price rises from- y profit-maximizing output rises from 5. . After the , and the $40 to $60; 20 units to 30 units $60 to $70; 20 units to 25 units $10 to $20; 100 units to 120 units $50 to $60; 10 units to 12 units a. c. d. greater than under perfect price Consumer surplus using perfect competition is discrimination and 6. greater than under monopoly. Price (3) 20 18. 16 14 12 10- HE 12345679 10 Qeantity a. $16; $8 b. $10; $20 c. $16; $12 d. $32; $8Explanation / Answer
First question is answered below
1.
A momopolist produces at the point MR = MC
Case 1: P = 100-2Q
MR = dPQ/dQ = 100-4Q
MC = 20
Set MR = MC
100-4Q = 20
Q1 = 20
P1 = 100-2(20) = $60
Case 2: P = 120-2Q
MR = 120-4Q
MC = 20
Set MR = MC
120-4Q = 20
Q2 = 25
P2 = 120-2(25) = $70
Thus,
Correct option: (b)
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