(e) What quantity 0 (d) Does the firm stay open or shut down in the sholl Il cur

Question

(e) What quantity 0 (d) Does the firm stay open or shut down in the sholl Il curve Q s|2-P and the total cost function TC Q2 (a) What is the price chosen by the mionopolist so as to maximize its profits? denote quantity and P denote price. A monopolist has the demand (b) Is the demand curve elastic or inelastic at the price chosen by the monopolist? Explain briefly. (c) Is the price chosen by the monopolist greater or less than the price under competi- tion? Explain briefly (d) Describe how a monopsony differs from a monopoly I The demand function for market

Explanation / Answer

a- MR = MC

12-2Q = 2Q, SO Q = 3 AND P = 9

B- ELASTICITY MEASURES THE PRICE RESPONSIVENESS OF THE CUSTOMERS DEMANDING THE PRODUCTS,

IT IS DQ/DP*P/Q = -1*9/3 = -3, SO DEMAND IS ELASTIC

C- UNDER PERFECT COMPETITION

P = MC

SO 12-Q = 22 AND THUS Q = 4 AND P = 8

SO PRICE CHOSEN BY MONOPOLIST IS HIGHER.

D- A MONOPSONY IS THE MARKET THAT IS CHARACTERIZED BY A SINGLE BUYER OR SINGLE DEMANDER, BUT A MONOPOLY ON OTHER HAND IS THE MARKET WITH SINGLE SELLER OR SINGLE PRODUCER.

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.