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A monopolist’s demand and Average total has cost functions are given by
Q=250-5P
ATC =10 +40/Q
A. What will be the profit maximizing level of price and output?
B. What will be the firm’s total profit if it exercises first degree price discrimination?
C. Assume the monopoly can sell his product in two separated markets with
the following demand functions
Q1 =110-P1
Q2=140-4P2
A. Determine the profit maximizing level output in each market
B. What price should the monopoly sell each unit of output in each market?
C. In which market is the price high? Why?
Given the demand function P=150 -0.5Q and the total Cost function TC=8Q
A. Maximize profit for a monopoly firm
B. Maximize profit for a perfectly competitive firm
C. Calculate the profit that monopolist lost to act as a perfectly competitive firm
Given the following demand and cost function, find the prices and output in each Market and the total profit, Assume that there are only two firms in the market.
P1 = 32 – 2Q1
P1 = 22 – Q2
TC = 10 + 2Q1 + Q2
Suppose that , firm under perfectly competition market produce two commodities X1 and X2 with corresponding prices birr 10 and birr 15 . If cost function of the firm is TC= 2x12 +x1x2+2x22 where x1 and x2 denote the level of output, then, determine the following questions.
i. Profit maximizing level of output x1 and x2
ii. The amount of maximum profit
7. Define the equilibrium of a market. Describe the forces that move a market toward its equilibrium. 8. Beer and pizza are complements because they are often enjoyed together. When the price of beer rises, what happens to the supply, demand, quantity supplied, quantity demanded, and the price in the market for pizza? 9. Describe the role of prices in market economies.
1. What is a competitive market? Briefly describe a type of market that is not perfectly competitive. 2. What are the demand schedule and the demand curve, and how are they related? Why does the demand curve slope downward?3. Does a change in consumers’ tastes lead to a movement along the demand curve or a shift in the demand curve? Does a change in price lead to a movement along the demand curve or a shift in the demand curve? 4. Popeye’s income declines, and as a result, he buys more spinach. Is spinach an inferior or a normal good? What happens to Popeye’s demand curve for spinach? 5. What are the supply schedule and the supply curve, and how are they related? Why does the supply curve slope upward? 6. Does a change in producers’ technology lead to a movement along the supply curve or a shift in the supply curve? Does a change in price lead to a movement along the supply curve or a shift in the supply curve?
On the appropriate diagram, show what happens to the market for pizza if the price of tomatoes rises. • On a separate diagram, show what happens to the market for pizza if the price of hamburgers falls.
Suppose the Market for ice cream is a monopolistic competition industry. Assume that the market is at the long term equilibrium.
draw two graphs. On the first one draw the demand and the market supply and identify the equilibrium point. On the second, draw the AVC, ATC, AFC, and MC curves as well as the marginal revenue cure for one firm.
suppose now that the demand decreases. Explain the consequences in the short run and in the long run.
Write ten pairs of commodities which are substitute for you and ten pairs of commodities ehich are complements for you
Given the following market function, find the equilibrium price and quantity:
[6 marks]
Qd = 54 – 4p
Qs = 4 + 4p
