ECON 102 Homework 8 Answer (Penn State University)

ECON 102 Homework 8 Answer (Penn State University) Question 1 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. How much output should the monopolist produce in order to maximize profit? Question 2 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. What price should the monopolist charge in order to maximize profit? Question 3 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. What is the deadweight loss associated with this monopoly? Question 4 A monopolist faces a demand curve given by: P = 105 – 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 $15. There are no fixed costs of production. How much profit will the monopolist make? Question 5 A monopoly Question 6 A profit maximizing monopolist will produce the quantity where Question 7 Suppose a monopolist faces the following demand curve: What is the marginal revenue of the 2nd unit of output? Question 8 Suppose the price elasticity of demand for a monopolist is -1/2. If price equals $10, then marginal revenue equals Question 9 Which of the following is the best example of price discrimination? Question 10 Suppose you have $100 to divide between person A and person B. Which of the following allocations is not Pareto Efficient?