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  3. 1. a monopolist faces demand of q = 20 - p. its co

1. A monopolist faces demand of Q = 20 - P. Its costs are TC...

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Economics

1. A monopolist faces demand of Q = 20 - P. Its costs are TC =2Q + 10.

f) If we had a perfectly competitive market with demand of Q =20 – P and a supply of P = 2, what market price and quantity wouldhave been the equilibrium? Is Q lower and P higher with amonopoly?

g) Now, go back to the original monopolist. The firm hasunveiled a successful new ad campaign. Its costs are the same asabove, but it now faces a demand of Q = 30 - P. (Satisfy yourselfthat this is an increase in demand.) Find, using either a table ora graph, the new price, quantity, and profits of this firm.

Answer & Explanation Solved by verified expert
4.4 Ratings (708 Votes)
1 f Perfectly competitive market Demand Q 20 P or P 20 Q Supply P 2 Market equilibrium price and quantity is where the Demand Supply 20 Q 2 Q 20 2 Q 18 and P 2 In perfect competition Equilibrium price 2    See Answer
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