Part C) Please calculate and fill-in the missing values, then answer the questio
ID: 1130066 • Letter: P
Question
Part C) Please calculate and fill-in the missing values, then answer the questions below: he 5 12 Quantity Price TRMR TC 10 5O 36 108 30 5 36 15 20 25 30 35 40 loo ao ngs and a.5 50 the marginal cost of the product is S1, and there are No fixed costs (ATC-MC-$1) What quantity would a Monopolist produce?5 What price would a Monopolist charge? What would be the Monopolist's profit? 2) Assume the market is now perfectly competitive (production costs are the same as above). 3 what quantity would be produced in the market? What would be the market price?5a How much profit would be earned in this market? 3) In which scenario (either: "Competitive" or "Monopoly"), is: Co Consumer Surplus highest? Producer Surplus highest? Total Surplus highest? Assume this market is now served by two competing firms (or duopolists). Note:You can answer with a range of values, but the exact value will be worth extra. 4) 25 What price would be charged? What quantity would be produced in the market?Explanation / Answer
Quantity
Price
TR
MR
0
10
0
5
9
45
45
10
8
80
35
15
7
105
25
20
6
120
15
25
5
125
5
30
4
120
-5
35
3
105
-15
40
2
80
-25
45
1
45
-35
50
0
0
-45
b) At Q =25 the corresponding price is 5. Therefore monopolist will charge a price equal to $5.
c) Profit = TR –TC
TC = ATC*Q = 1*25 =25
TR =P*Q = 5*25 = 125
Profit = 125-25 = $100
b) Producer surplus is higher under monopoly because price received by seller will be higher.
c) Total surplus is highest under perfect competition because deadweight loss is zero under competition.
4)
a) The price under duopoly will be between $1 and $5.
b) The quantity produced will be between 45 and 25 units.
*because duopoly is in the middle of perfect competition and monopoly.
Quantity
Price
TR
MR
0
10
0
5
9
45
45
10
8
80
35
15
7
105
25
20
6
120
15
25
5
125
5
30
4
120
-5
35
3
105
-15
40
2
80
-25
45
1
45
-35
50
0
0
-45
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