Exam 23: Monopoly

A profit-maximizing monopoly faces an inverse demand function described by the equation p(y) = 40 - y and its total costs are c(y) = 7y, where prices and costs are measured in dollars. In the past it was not taxed, but now it must pay a tax of 6 dollars per unit of output. After the tax, the monopoly will

A monopolist has the total cost function c(q) = 750 + 5q. The inverse demand function is 140 - 7q, where prices and costs are measured in dollars. If the firm is required by law to meet demand at a price equal to its marginal costs,

For a monopolist who faces a downward-sloping demand curve, marginal revenue is less than price whenever quantity sold is positive.

A profit-maximizing monopolist faces a downward-sloping demand curve that has a constant elasticity of -4. The firm finds it optimal to charge a price of $24 for its output. What is its marginal cost at this level of output?

The demand for a monopolist's output is , where p is its price. It has constant marginal costs equal to $5 per unit. What price will it charge to maximize its profits?

A natural monopolist has the total cost function c(q) = 350 + 20q, where q is its output. The inverse demand function for the monopolist's product is p = 100 - 2q. Government regulations require this firm to produce a positive amount and to set price equal to average costs. To comply with these requirements

A monopolist faces the demand function Q = . If she charges a price of p, her marginal revenue will be

Peter Morgan sells pigeon pies from his pushcart in Central Park. Due to the abundant supplies of raw materials, his costs are zero. The demand schedule for his pigeon pies is p(y) = . What level of output will maximize Peter's profits?

A certain monopolist has a positive marginal cost of production. Despite this fact, the monopolist decides to produce a quantity of output that maximizes total revenues. Assume that the marginal revenue curve for this monopolist always has a negative slope. Then the monopolist

A monopolist faces the demand curve q = 90 - , where q is the number of units sold and p is the price in dollars. She has quasi-fixed costs, C, and constant marginal costs of $20 per unit of output. Therefore her total costs are C + 20q if q > 0 and 0 if q = 0. What is the largest value of C for which she would be willing to produce positive output?

The demand for a monopolist's output is 7,000 divided by the square of the price in dollars that it charges per unit. The firm has constant marginal costs equal to 1 dollar per unit. To maximize its profits, it should charge a price of

The demand curve for the output of a certain industry is linear; q = A - Bp. There are constant marginal costs of C. For all values of A, B, and C such that A > 0, B > 0, and 0 < C < ,

An airline has exclusive landing rights at the local airport. The airline flies one flight per day to New York with a plane that has a seating capacity of 100. The cost of flying the plane per day is $4,000 + 10q, where q is the number of passengers. The number of flights to New York demanded is q = 165 - .5p. If the airline maximizes its monopoly profits, the difference between the marginal cost of flying an extra passenger and the amount the marginal passenger is willing to pay to fly to New York is

A profit-maximizing monopolist faces a downward-sloping demand curve that has a constant elasticity of -3. The firm finds it optimal to charge a price of $12 for its output. What is its marginal cost at this level of output?

Since a monopoly makes excess profits beyond the normal rate of return on investment, an investor is likely to get a higher rate of return in the stock market by investing in monopolistic rather than in competitive industries.

Since a monopoly charges a price higher than marginal cost, it will produce an inefficient amount of output.

A monopolist faces the inverse demand function described by p = 50 - 4q, where q is output. The monopolist has no fixed cost and his marginal cost is $5 at all levels of output. Which of the following expresses the monopolist's profits as a function of his output?

The demand for Professor Bongmore's new book is given by the function Q = 5,000 - 100p. If the cost of having the book typeset is $9,000, if the marginal cost of printing an extra copy is $4, and if he has no other costs, then he would maximize his profits by

A monopolist faces a constant marginal cost of $1 per unit and has no fixed costs. If the price elasticity of demand for this product is constant and equal to -4, then

An obscure inventor in Strasburg, North Dakota, has a monopoly on a new beverage called Bubbles, which produces an unexplained craving for Lawrence Welk music. Bubbles is produced by the following process: Q = min{ , W}, where R is pulverized Lawrence Welk records and W is gallons of North Dakota well water. P_R = P_W = $1. Demand for Bubbles is Q = 576P^-2A^0.5. If the advertising budget for Bubbles is $81, the profit-maximizing quantity of Bubbles is