The following question is based on the demand and cost data for a pure monopolist given in the table below. Output Price Total Cost 0 $500 $250 12345 300 260 250 290 200 350 150 500 100 680 Refer to the above table. If the monopolist were forced to produce the socially optimal output through the imposition of a ceiling price, the ceiling price would have to be set at: O $100 $150 O $200 $250 www.yout House of High Ant SWEPT his OVER HIM

The following question is based on the demand and cost data for a pure monopolist given in the table below. Output Price Total Cost 0 $500 $250 12345 300 260 250 290 200 350 150 500 100 680 Refer to the above table. If the monopolist were forced to produce the socially optimal output through the imposition of a ceiling price, the ceiling price would have to be set at: O $100 $150 O $200 $250 www.yout House of High Ant SWEPT his OVER HIM

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter15: Decision Analysis

Section: Chapter Questions

Problem 13P: The following profit payoff table was presented in Problem 1: The probabilities for the states of...

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Consider a product market with three consumers A, B and C with demand function PA = 6 – QA, PB = 6 – 2QB and PC = 12 – QC respectively, where P is the price in dollars and QA, QB and QC are the quantities demanded by Consumer A, B and C respectively. The marginal cost of the product is constant at $4. (i) If the product is public good, analyse the product and determine the optimal quantity of the product in the market.(ii) How will your answer be different if the product is a private good instead? (Hi there, may I requst for a detailed step by step explanation as i struggle with this topic. Thank you)
Consider a product market with three consumers A, B and C with demand function PA = 6 – QA, PB = 6 – 2QB and PC = 12 – QC respectively, where P is the price in dollars and QA, QB and QC are the quantities demanded by Consumer A, B and C respectively. The marginal cost of the product is constant at $4. (i) If the product is public good, analyse the product and determine the optimal quantity of the product in the market.(ii) How will your answer be different if the product is a private good instead?
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Let's tackle each part of the question step by step:1. **Monopoly Market:** A) To find the profit-maximizing output and price, we first need to find the monopolist's marginal revenue (MR) function. MR is the derivative of total revenue (TR) with respect to quantity (Q). TR is simply the product of price (P) and quantity (Q). \[TR = P \times Q = (120 - Q) \times Q = 120Q - Q^2\] Taking the derivative of TR with respect to Q: \[MR = \frac{dTR}{dQ} = \frac{d(120Q - Q^2)}{dQ} = 120 - 2Q\] Setting MR equal to marginal cost (MC) to maximize profit: \[MR = MC\] \[120 - 2Q = 20\] \[100 = 2Q\] \[Q = 50\] Now, substitute $Q = 50$ into the demand function to find the price: \[P = 120 - Q = 120 - 50 = 70\] So, the profit-maximizing output is 50 units, and the price is $70. B) To find the total profit, we need to subtract total costs from total revenue: \[TR = P \times Q = 70 \times 50 = 3500\] \[TC = 20Q 200 = 20(50) 200 = 1000\] Total profit: \[Total\ Profit = TR - TC = 3500 - 1000 = 2500\]2.…
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Henderson Farms reports the following results for the month of November: Sales (10,000 units) Variable costs Contribution margin Fixed costs Net income $600,000 1. 420,000 180,000 110,000 $70,000 Management is considering the following independent courses of action to increase net income. Increase selling price by 5% with no change in total variable costs. 2. Reduce variable costs to 66% of sales. 3. Reduce fixed costs by $10,000.