M PS Chapter 15 C ezto.mheducation.com /hm.tpx Price 140 700 MC MR. 10 20 30 40
ID: 1207373 • Letter: M
Question
M PS Chapter 15 C ezto.mheducation.com /hm.tpx Price 140 700 MC MR. 10 20 30 40 50 60 70 80 90 100 110 120 130 140 Quantity Instructions: Round your answers to the nearest whole number. s a. If the duopolists evenly split the quantity a monopolist would produce, the monthly profit for each duopolist ls b. If he duopolists evenly split the quantity a monopollst would produce the deadweight loss ls c. If duopollst A decides to Increase producton by 10 units, the monthly profit for duopolist A ls s and for duopolist B d. If duopolist A. Increases production by 10 units, the deadwelght loss ls I'm Cortana. Ask me anything. 4:20 PM A 4/28/2016Explanation / Answer
Monopoly Q = 50 , and P =70
MC = 20
Each firm Q = Q/2 = 20/2 = 10
a. Profit = P*Q/2 - MC*Q/2 = 70*25 - 20*25 = 1,250
b. Dead weight loss = 1/2(Price - MC)(Perfect competition Q - Q) = 1/2*(70-20)(100-50) = 1,250
c. Doupolist A's Q = 35 , Doupolist B's Q = 25 , P = 60
Doupolist A Profit = P*QA - MC*QA = 60*35 - 20*35 = 1,400
Duopolist B profit = P*QB - MC*QB = 60*25 - 20*25 = 1,000
d. Deadweight = 1/2(Price - MC)(Perfect competition Q - Q) = 1/2*(60-20)(100-60) = 8,00
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