Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.

Get a Professional Answer

Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.

100% Satisfaction Guarantee

Rate the answer you receive.

Ask Ray Atkinson Your Own Question

Ray Atkinson, Graduate Student

Category: Homework

Satisfied Customers: 1889

Experience: Inner-city high school substitute teacher. Degrees in mathemetics, accounting, and education. Years and years of tutoring.

29937297

Type Your Homework Question Here...

Ray Atkinson is online now

A monopolist faces a demand curve given by:
P = 105 – 3Q,

Resolved Question:

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.

A) (2 points) What quantity should the monopolist produce in order to maximize profit?

B) (2 points) What price should the monopolist charge in order to maximize profit?

C) (2 points) How much profit will the monopolist make?

D) (2 points) What is the deadweight loss created by this monopoly (hint: compare the monopoly outcome with the perfectly competitive outcome).

E) (2 points) If the market were perfectly competitive, what quantity would be produced?

(A) 15 units gives the maximum profit. (B) The price is $60. (C) The revenue is 60*15-15*15=900-225=675 Under perfect competition, MR=MC, and MC=15, and MR=15 when Q=13, so that is the answer for (E) Getting D is going to take me a little longer to compute.

Customer:

what's answer of D? Thank you.

Ray Atkinson :

I'm trying to get it. The formula is not working for me.

Customer:

Ok, take your time.

Ray Atkinson :

I am getting a deadweight loss of $12. (15-13)*(51-45) = 2*6 = 12

Ray Atkinson :

I just did the numbers again, and I get the same answer, so I am confident.

Ray Atkinson and 2 other Homework Specialists are ready to help you