# A monopolist faces a demand curve given by: P = 200 - 10Q, where P is the price of the good and Q...

## Question:

A monopolist faces a demand curve given by: {eq}P = 200 - 10Q, {/eq} where {eq}P {/eq} is the price of the good, and {eq}Q {/eq} is the quantity demanded. The marginal cost of production is constant and is equal to $60. There are no fixed costs of production.

a. What quantity should the monopolist produce in order to maximize profit?

b. What price should the monopolist charge in order to maximize profit?

c. How much profit will the monopolist make?

d. What is the deadweight loss created by this monopoly?

## Monopoly

A monopoly is a market structure with no competition. There is only one producer and the producer makes above-normal profits by charging higher prices.

## Answer and Explanation: 1

P = 200 - 10Q

So, revenue R = P * Q = 200Q - 10Q^2

MR (marginal revenue) = dR/DQ = 200 - 20Q

MC = 60

At maximum profit, MR = MC

200 - 20Q = 60

a) Q=7 -> this is the quantity it should produce

b) P = 130 -> this is the price it should produce

c) profit = R - Total cost

R = 200Q - 10Q^2 = 1400-490 =910

Total cost = Q * 60 =420

profit = 910-420 =490

d) Deadweight loss is given by total surplus under perfect competition - total surplus under monopoly

If there was perfect competition, price and quantity would be as follows

price = marginal cost = 60

Q = (200-P)/10= 140/10 = 14

Thus, price would be lower than monopoly price of 130 and quantity higher than monopoly quantity of 7

Surplus in perfect competition:

consumer surplus = 1/2 * 14* (200-60) = 980

producer surplus = 0

total surplus = 980

Surplus in monopoly:

consumer surplus = 1/2* 7 * (200-130)= 245

producer surplus = 7 * (130-60) = 490

total surplus = 735

Deadweight loss = drop in surplus = 245

#### Ask a question

Our experts can answer your tough homework and study questions.

Ask a question Ask a question#### Search Answers

#### Learn more about this topic:

from

Chapter 7 / Lesson 2Understand the meaning of a monopoly in economics and what it does. Also, know the characteristics of a monopoly and the different types of monopolies.

#### Related to this Question

- A monopolist faces a demand curve given by P = 220 - 3Q, where P is the price of the good, and Q is the quantity demanded. The marginal cost of production is constant and is equal to $40. There are no fixed costs of production.
- A monopolist faces a demand curve given by P = 70 - 2Q where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to $6. There are no fixed costs of production. A. What quantity should the mo
- A monopolist faces a demand curve given by P = 220 - 3Q, where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to $40. There are no fixed costs of production. a. What quantity should the
- A monopolist faces a demand curve given by P = 40 - Q, where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to $2. There are no fixed costs of production. To answer the following questio
- A monopolist faces a demand curve given by: P = 200 - 10Q, where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to $60. There ar
- A monopolist faces a demand curve given by P = 40 - Q, where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to $2. There are no fixed costs of production. How much output should the mono
- A monopolist faces a demand curve given by P = 40 - Q where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to $2. There are no f
- A monopolist faces a demand curve given by P=220-3Q, where P is the price of the good, and Q is the quantity demanded. The marginal cost of production is constant and is equal to $40. There are no fixed costs for productions. What quantity should the mono
- A monopolist faces a demand curve given by P = 40 - Q where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to $2. There are no fixed costs of production. Hint: Drawing a graph could
- A monopolist faces a demand curve given by P = 40 - Q where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to $2. There are no fixed costs of production. Hint: Drawing a graph could be
- A monopolist faces a demand curve given by P = 40 - Q where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to $2. There are no fixed costs of production. Hint: Drawing a graph co
- A monopolist faces a demand curve given by P = 40 - Q where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to $2. There are no fixed costs of production. Hint: Drawing a graph coul
- A monopolist faces a demand curve given by P = 40 - Q where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to $2. There are no fixed costs of production. Hint: Drawing a graph could b
- A monopolist faces a demand curve given by P = 40 - Q where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to $2. There are no fixed costs of production. Hint: Drawing a graph
- A monopolist faces a demand curve given by P=70-2Q, where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to $6. There are no fixed
- A monopolist faces a demand curve given by P = 210 - 5Q where P is the price of the good and Q is quantity demanded. The marginal cost of production is constant and is equal to $60. There are no fixed
- MICROECONOMICS A monopolist faces a demand curve P = -20Q + 10 and MR = -4Q + 10. Total Cost = 2d (no fixed cost) and MC = 2. a) What is the monopolist's profit-maximizing production quantity (Q*)?
- A monopolist faces a demand curve: P = 100 - Q for its product. The monopolist has fixed costs of 1000 and a constant marginal cost of 4 on all units. Find the profit maximizing price, quantity, and p
- A monopolist faces the demand curve P = 100 - 2Q, where P is the price and Q is the quantity demanded. If the monopolist has a total cost of C = 50 + 20Q, determine its profit-maximizing price and output.
- A monopolist faces market demand given by Q_D = 65 - P and cost of production given by C = 0.5Q^2 + 5Q + 300. A. Calculate the monopolist's profit-maximizing output and price. B. Graph the monopolist's demand, marginal revenue, and marginal cost curves. S
- A monopolist faces a demand curve P = 50 - 5Q where P is the product price and Q is the output. The monopolists cost function is C(Q) = 10Q. What are the monopolist's profit maximizing price, output, and profit? What are the consumer surplus and dead-weig
- A monopolist faces a demand curve given by P = 10 - Q and has constant marginal (and average cost) of 2. What is the output and the price that maximizes profit for the monopolist? A) Q = 0, P = 10 B) Q = 2, P = 8 C) Q = 4, P = 6 D) Q = 8, P = 2 E) None of
- A monopolist faces a demand curve given by P = 10 - Q and has constant marginal (and average cost) of 2. What is the output and the price that maximizes profit for this monopolist? (a) Q = 0, P = 10. (b) Q = 2, P = 8. (c) Q = 4, P = 6. (d) Q = 8, P = 2. (
- A monopolist faces a demand function x = 10 - P where p is the price of the product and x is the quantity demanded. The monopolist has a cost function c(x) = x. Here, x is quantity produced. Find x an
- A monopsony faces a supply curve of p = 10 + Q. What is its marginal expenditure curve? If the monopsony has a demand curve of p = 50 - Q, what are the equilibrium quantity and price? How does this eq
- The demand curve that a monopolist faces is given by P = 75 - 0.5 Q, so their marginal revenue is MR = 75 - Q, and the marginal cost function is given by MC = 2 Q. Assume also that ATC at the profit-maximizing level of production is equal to $12.50. The d
- A monopolist faces a demand curve Q = 70 - P and has total costs TC(Q) = 0.25Q2 - 5Q + 300. a. Calculate the inverse demand curve P(Q) by solving the demand curve for P in terms of Q. b. Express the firm's total revenue as a function of quantity by multip
- A monopolist faces the following demand curve: P = 140 - 0.3Q , its total cost is given by: TC = 300 + 0.2Q^2 and its marginal cost is given by: MC = 0.4Q. (a) If it is a single-price monopolist, what is its profit-maximizing price and quantity? Show
- A monopolist can produce at a constant marginal and average cost of $1/unit and faces a market demand curve of Q = 100 - 20P and MR = 5 - Q/10, where Q is quantity (in thousands), MR is marginal revenue, and P is price. a. Calculate the quantity and price
- Let the monopolist face a demand curve p=240-2Q Assume that the total cost of producing Q \geq 0 units of output is given by: C(Q)= (3/2) Q^2 + 30Q a. What is the monopolists proift maximizing output level? What price/unit will this monopolist charge? b.
- A monopolist faces demand P = 10 - Q. It has costs C(Q) = 2Q. It can perfectly price discriminate. a. What is its marginal revenue curve? Graph the demand curve. b. Derive the profit maximizing outpu
- The inverse demand a monopoly faces is p = 100-Q+A0.5, where Q is quantity, p is the price, and A is its level of advertising. Its marginal cost of production is constant at $10 (no fixed cost), and i
- A monopolist faces the following demand curve: Price Quantity demanded $51 1 $47 2 $42 3 $36 4 $29 5 $21 6 $12 7 The monopolist has total fixed costs of $60 and has a constant marginal cost of $15. What is the profit-maximizing level of production? A) 5 u
- Suppose that a monopolist faces the demand curve P) 2 Q, and has total cost curve TC(Q) = Q^2. (a) If the firm is unable to price discriminate, find the firm's profit maximizing price and quantity.
- Suppose a monopolist faces the demand curve P = 100 - 3Q. The marginal cost of production is constant and equal to $10, and there are no fixed costs. a. What is the monopolist's profit-maximizing level of output? b. What price will the profit-maximizing m
- Suppose a monopolist faces the demand curve P = 250 - 2Q. The marginal cost of production is constant and equal to $10, and there are no fixed costs. A. What is the monopolist's profit-maximizing level of output? B. What price will the profit-maximizing m
- A monopolist faces demand given by: P = 100 - 0.4QD, and has marginal costs given by: MC = 10 + 0.2Q. (A) Draw the demand, marginal revenue and marginal cost curves. Calculate and show how much this firm will sell and what they will charge. (B) Calculate
- A monopolist faces a demand curve MB = 300 - 10Q and has declining marginal costs equal to MC = 150 = 5Q. A. Compute the optimal quantity Q* and the optimal price P*. B. Write down the equation for the monopolists' marginal revenue curve MR. C. How much w
- A monopolist faces demand given by: P = 100 - 0.4Qd, and has marginal costs given by: MC = 10 + 0.2Q a. Draw demand, marginal revenue and marginal cost curves. Calculate and show how much this firm
- Assume for simplicity that a monopolist has no costs of production and faces a demand curve given by Q = 150-P a. Calculate the profit-maximizing price-quantity combination for this monopolist. Also
- A monopolist faces a demand curve given by P = 10 - Q and has constant marginal and average cost of 2. What is the economic profit made by this profit-maximizing monopolist? A) 0 B) 12 C) 14 D) 16
- A monopolist faces a demand curve given by P = 10 - Q and has a constant marginal (and average) cost of $2. What is the economic profit made by this profit-maximizing monopolist? a. $0 b. $12 c. $14 d. $16 e. none of the above
- A monopolist can produce a high quality product and face demand of Q = 60 - 0.5(P), Marginal cost = 12 and Fixed cost = 800 or a low quality product and face demand of Q = 60 - P, Marginal cost = 4 and Fixed cost equal 100. a) Will the monopolist choose h
- A monopolist faces a demand Y(p)=100-1/2P and faces a cost of production a. Derive the profit maximizing price and quantity for the monopolist. b. If the government forced the monopolist to charge at
- A monopolist faces a demand curve given by P=10-Q and has constant marginal (and average cost) of 2. What is the output and the price that maximizes profit for this monopolist? a. Q = 0, P = 10 b. Q = 2, P = 8 c. Q = 4, P = 6 d. Q = 8, P = 2 e. None of th
- A monopolist faces the demand curve P = 11 - Q. The firm's cost function is C = 6Q. a. Draw the demand and marginal revenue curves, and the average and marginal cost curves. What are the monopolist's
- If a firm with pricing power in the market faces a demand curve of P = 1800 - 2Q and marginal costs of MC = 200, how much is the equilibrium (profit-maximizing) quantity?
- Suppose a monopolist's marginal costs are constant at $20 per unit, and it faces a demand curve of Q = 300 - p. a. If it cannot price discriminate, what are the profit-maximizing price and quantity?
- Suppose that a monopolist faces market demand of Q = 200 - 0.5P and a cost function of C = Q^2 + 40Q + 50. On a well-labelled graph, show the marginal cost, and marginal revenue in this market. What is the profit-maximizing price and quantity for the mon
- Suppose your firm faces a demand curve of (P = 90 - 0.30Q) and the marginal cost of production is $10/unit. Find the profit-maximizing output and price. Is this outcome on the elastic, inelastic, or unitary elastic part of the demand curve? What are your
- If the demand curve of a company is P = $36 - $2Q and fixed cost is $10, the variable cost is 5Q + 0.5Q2. 1) What would be the quantity for revenue maximization and profit maximization? 2) What would be the quantity for break-even?
- Suppose a monopolist has costs to produce output of TC = 4.5Q^2 and faces the demand curve Q = 2000 - 2P. Find the equilibrium quantity, equilibrium price, and monopoly profit?
- Suppose a monopolist has costs to produce output of TC = 4.5Q(squared) and faces the demand curve Q = 2000 - 2P. Find the equilibrium quantity, equilibrium price, and monopoly profit.
- A monopolist faces the following demand curve: P = 120 - 0.02Q, where Q is production, and P is price measured in cents per unit. The firm's cost function is given by C = 60Q + 25,000. What is the level of production, price and total profits per week?
- Assume for simplicity that a monopolist has no costs of production and faces a demand curve given by Q = 2000 - 2P a. Calculate the profit-maximizing price-quantity combination for this monopolist.A
- A monopolist faces a market demand curve given by Q = 53 - P. Its cost function is given by C = 5Q + 50, i.e. its MC = $5. a. Calculate the profit-maximizing price and quantity for this monopolist. Also, calculate its optimal profit. b. Suppose a second
- A monopolist faces market demand given by P = 100 - 3Q. For this market, MR = 100 - 6Q and MC = 25. What quantity of output will the monopolist produce in order to maximize profits?
- Two identical firms make up an industry in which the market demand curve is represented by P = 1,250 - 0.25 Q, where Q is the quantity demanded and P is the price per unit. The marginal revenue curve is given by MR = 1,250 - 0.5 Q. The marginal cost of pr
- A monopoly faces a market demand curve given by: Q = 60 - P, and a marginal revenue curve given by: MR = 60 - 2Q. If MC = AC = 10; A) Calculate profit-maximizing price and quantity for the monopoly. B
- A monopolist faces the following demand curve: Price Quantity demanded $10 5 $9 10 $8 16 $7 23 $6 31 $5 49 $4 52 $3 60 The monopolist has total fixed costs of $40 and a constant marginal cost of $5. At the profit-maximizing level of output, the monopolist
- A monopolist faces a market demand curve given by: Q = 70 - P. This monopolist charges a single price for its output. If the monopolist can produce at constant average and marginal costs of AC = MC =
- Suppose a monopolist faces the following demand curve: P = 440 - 7Q. The long-run marginal cost of production is constant and equal to $20, and there are no fixed costs. a) What is the monopolist's profit-maximizing level of output? b) What price will
- A profit maximizing monopolist faces the demand curve P = 90 - Q and has total cost of 30Q. If the monopolist charges only one price, what is Q, P, producer surplus, consumer surplus, and total revenue?
- A monopolist faces demand given by P = 100 - 0.4QD and has marginal costs given by MC = 10 + 0.2Q. a. Draw the demand, marginal revenue, and marginal cost curves. Calculate and show how much this firm will sell and what they will charge. b. Calculate the
- A demand curve is given by P= -1/2Q + 100. A marginal cost curve is given by MC = 2Q + 10. An average cost curve is given by ATC = Q + 10. a. How many output will the firm produce? b. What is the total revenue? c. What is the total cost? d. What is the pr
- A monopolist faces a demand curve given by P=10-Q and has constant marginal (and average cost) of 2. What is the economic profit made by this profit-maximizing monopolist? a. 0 b. 12 c. 14 d. 16 e. None of the above
- Suppose a monopolist has costs to produce output of TC=1/6 Q^2+10 and faces the demand curve Q=3000-3P. Find equilibrium quantity, equilibrium price, and monopoly profit.
- Suppose a monopolist faces the following demand curve: P = 100 - 3Q. Marginal cost of production is constant and equal to $10, and there are no fixed costs. What price will the profit maximizing monopolist charge? a. $100 b. $55 c. $45 d. $15 e. $10 f. No
- A monopolist has total cost TC = 200 + .5 Q2. Marginal cost is Q and the market demand is Q = 100 - P/2. 1) What is marginal revenue? 2) What quantity maximizes profits? 3) What is the price in th
- For the Demand function P = 100 - Q when facing a constant marginal cost of 25, determine the perfectly competitive, monopolist and Cournot Duopoly price and quantity.
- The demand for a monopoly is P = 60 - 0.3QD, where P is price and QD is quantity demanded. a) Plot the demand and marginal revenue curves. b) What is the equation for the firm's marginal revenue? c) At what output level would the monopoly maximize total r
- A monopolist faces market demand given by P 200 Q. For this market, MR 200 2Q and MC 3Q. What quantity of output will the monopolist produce in order to maximize profits?
- Tinysoft is a monopolist that faces demand curve D(p) = 7p^-3, has constant marginal costs MC = 30 and no fixed cost. What price should the monopolist charge? (a) p = 45 (b) p = 22.5 (c) p = 0.77
- Suppose a monopolist faces the following demand curve: P = 100 - 3Q. Marginal cost of production is constant and equal to $10, and there are no fixed costs. What is the monopolist's profit maximizing level of output? a. 10 b. 15 c. 16 d. 30 e. 33 f. None
- A monopolist can produce its output at a constant average and constant marginal cost of ATC = MC = 5. The monopoly faces a demand curve given by the function Q = 53 - P and a marginal revenue curve that is given by MR = 53 - 2Q. a. Draw the firm's demand
- 1. Suppose you are a monopolist and the downward-sloping demand curve you face takes the form: P=30-3Q: Quantity Price Total Revenue Marginal Revenue Total Cost Marginal Cost Profit 0 1 2
- A monopolist faces the inverse demand curve P = 60 - Q and its marginal costs are 2Q. What is the monopolist's Lerner index at its profit-maximizing quantity? a. 1 b. 3/7 c. 1/2 d. 1/3
- Suppose the demand curve for widgets is given by P = 100 - Q, where P is the price and Q is the quantity. a. If the market is served by a single monopolist with constant marginal cost of MC1 = $80, what is its incentive (or additional profit) from develop
- A monopolist faces the following demand curve P = 222 - 2Q. The monopolist's cost is given by C = 2Q. Calculate the profit-maximizing quantity and the corresponding price. What is the resulting profit/loss? Calculate the monopolist's markup.
- Ten firms, in a Cournot oligopoly, are facing the market demand given by P = 140 - 0.4Q, where P is the market price and Q is the market quantity demanded. Each firm has a (total) cost of production given by C(qi) = 200 + 10qi, where qi is the quantity pr
- A monopoly faces demand given by Q = 200 -P. The marginal cost MC = $10 is constant. The marginal revenue MR = 200 -2Q. a.Graphically show the monopoly's equilibrium, b.What is the equilibrium price and quantity? c.What are the profits earned by the
- 2. A monopolist has inverse demand P = 12 ? Q and cost of production C(Q) = Q2. Find its profit maximizing output, resulting pric2. A monopolist has inverse demand P = 12 - Q and cost of production C(
- Suppose a monopolist faces the following demand curve: P = 596-6Q. Marginal cost of production is constant and equal to $20, and there are no fixed costs. a) What is the monopolists profit maximizing level of output? b) What price will the profit maximi
- A monopolist faces a demand curve given by P = 10 - Q and has constant marginal (and average cost) of 2. What is the value of the deadweight loss generated by this monopolist? A) 2 B) 4 C) 6 D) 8 E) None of the
- A monopolist firm faces the following cost curve: C(Q) = Q^2 + 12, where 'Q' is the output produced. The demand for its product is given by P = 24 - Q. A) Derive the MR for this firm. B) Find the equi
- The demand for a monopolist's product is Q=700-5P. The monopolist also recognized that its marginal revenue is MR=140-0.2Q and the marginal cost is $40. The firm is very happy there are no fixed costs. i. What is the optimal price and quantity? What is th
- Suppose that a monopolist faces the demand curve P(Q) = 40 - Q, and has total cost curve TC(Q) = F + 3/2 Q^2, where F is a fixed cost. A) What would be the producer surplus in the market? B) What is t
- Suppose that a monopolist faces market demand of Q = 200 - 0.5P and a cost function of C= Q^2 + 40Q + 50. What is the profit-maximizing price and quantity for the monopolist?
- The monopolist faces a demand curve given by D(p) = 100 - 2p. Its cost function is c(y) = 2y. a. What is its optimal level of output and price? b. If the demand curve facing the monopolist has a constant elasticity of 2, then what will be the monopolist's
- A monopolist faces the following demand, as shown in the table. It has total fixed costs of $60 and has a constant marginal cost of $15. What is the profit-maximizing price? | Price | Quantity | $51 | 1 | $47 | 2 | $42 | 3 | $36 | 4 | $29 | 5 | $21 |
- A monopolist faces an inverse demand function of both quantity, Q, and advertising effort, A, P(Q, A) = 70 - Q + A^{1 / 2}. The marginal cost of production is constant and 10, and the marginal cost of advertising is constant and 1. (a) What is the monopol
- Suppose a monopolist faces the following demand curve: P = 200 - 6Q The marginal cost of production is constant and equal to $20, and there are no fixed costs. (a) How much consumer surplus would there be if this market was perfectly competitive? (b) What
- Assume a monopolist faces a market demand curve of 50 = Q - frac{1}{2}P and has a short run total cost function C = 640 + 20Q. A. What is the profit-maximizing level of output? What are the profits? Graph the marginal revenue, marginal cost, and demand cu
- Suppose a monopolist faces the following demand curve: P = 88 - 3Q. The long-run marginal cost of production is constant and equal to $4, and there are no fixed costs. A) What is the monopolist's prof
- If a monopolist's price as a function of quantity can be expressed as P = 100 - Q, and the firms' cost curve is 10 + 5Q, what is the profit maximizing solution?
- A single price monopolist faces a demand curve given by Q = 200 - 2p and has constant marginal (and average total cost) of 20. What is the economic profit made by this profit-maximizing monopolist? A. 0 B. 800 C. 3200 D. 6400 E. None of the above
- Suppose a monopolist faces the following demand curve: P = 100 - 3Q. Marginal cost of production is constant and equal to $10, and there are no fixed costs. What is the value of consumer surplus? a. $300 b. $100 c. $412.50 d. $337.50 e. $750 f. None of t
- Assume a monopolist faces a market demand curve p = 100 - 2Q and MC = 20. a. What is the profit-maximizing level of output and price? b. Graph the marginal revenue, marginal cost, and demand curves,