Exercises . Exercise #1. Suppose a single-product monopoly facing a linear demand q = a - p with a > 0. The monopoly inc

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Exercises Exercise 1 Suppose A Single Product Monopoly Facing A Linear Demand Q A P With A 0 The Monopoly Inc 1 (49.46 KiB) Viewed 23 times

Exercises . Exercise #1. Suppose a single-product monopoly facing a linear demand q = a - p with a > 0. The monopoly incurs a constant marginal cost 0 <c<a and has no fixed cost Q1) Determine the profit maximizing price. Q2) Determine the profit maximizing quantity. Q3) Determine the monopoly's profit at the profit maximizing quantity Q4) Determine the inverse demand expressing p as a function of q. Q5) Determine the marginal revenue. Q6) Determine the consumer surplus at the profit maximizing quantity, Q7) Determine the deadweight loss at the profit maximizing quantity (compared to the perfectly competitive equilibrium). Q8) Determine the price elasticity of demand at the monopoly's profit maximizing price Q9) Determine the price elasticity of demand at the perfectly competitive price, Q10) Does it matters if the monopoly sets price instead of quantity? A) Yes B) No . . . . 24