Exam 23: Monopoly-Part A

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 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 inverse demand function described by p = 23 - 5q, where q is output.The monopolist has no fixed cost and his marginal cost is $6 at all levels of output.Which of the following expresses the monopolist's profits as a function of his output?

The Hard Times Concrete Company is a monopolist in the concrete market.It uses two inputs, cement and gravel, which it buys in competitive markets.The company's production function is q = c^1/2g^1/2q, where q is its output, c is the amount of cement it uses, and g is the amount of gravel it uses.If the price of cement goes up, the firm's demand for cement

A monopolist faces the demand function Q =4,000/(p +6)^-2.If she charges a price of p, her marginal revenue will be

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

A monopolist will always equate marginal revenue and marginal cost when maximizing profit.

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

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 = 2,000 - 100p.If the cost of having the book typeset is $7,000, 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 natural monopoly occurs when a firm gains ownership of the entire stock of some natural resource and thus is able to exclude other producers.

A monopolist faces the inverse demand curve p = 64 -2q.At what level of output is his total revenue maximized?

The Cleveland Visitors Bureau is the exclusive national marketer of weekend getaway vacations in Cleveland, Ohio.At current market prices, the price elasticity of demand is -1.To maximize profits, the bureau should

A monopoly has the demand curve q = 10,000 - 100p.Its total cost function is c(q)= 1,000 + 10q.The government plans to tax the monopoly's profits at a rate of 50%.If it does so, the monopoly will

If he produces anything at all, a profit-maximizing monopolist with some fixed costs and no variable costs will set price and output so as to maximize revenue.

An industry has two firms, a leader and a follower.The demand curve for the industry's output is given by p = 456 - 6q, where q is total industry output.Each firm has zero marginal cost.The leader chooses his quantity first, knowing that the follower will observe the leader's choice and choose his quantity to maximize profits, given the quantity produced by the leader.The leader will choose an output of

A profit-maximizing monopolist has the cost schedule c(y)= 40y.The demand for her product is given by y = 600/p⁴, where p is her price.Suppose that the government tries to get her to increase her output by giving her a subsidy of $21 for every unit that she sells.Giving her the subsidy would make her

A monopolist has the total cost function c(q)= 800 +8q.The inverse demand function is 80 - 6q, 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,

In a market with the inverse demand curve P = 10 - Q, Brand X is a monopolist with no fixed costs and with a marginal cost of $2.If marginal cost rises to $4, by how much will the price of Brand X rise?

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{R/3, 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 = 1,024P^-2A^0.5.If the advertising budget for Bubbles is $100, the profit-maximizing quantity of Bubbles is