Chapter_14_Homeworksol

Chapter_14_Homeworksol - Chapter 14 Homework (Selected)...

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Chapter 14 Homework (Selected) Solutions 14.1 a. P = 53 - Q PQ = 53 Q - Q 2 MR = 53 - 2 Q = MC = 5 Q = 24, P = 29, π = ( P - AC) Q = 576 b. MC = P = 5 P = 5, Q = 48 c. Competitive Consumers' Surplus = 2 (48) 2 = 1152. Under monopoly: Notice that the sum of consumer surplus, profits, and Deadweight loss under monopoly equals competitive consumer surplus. 14.2 Market demand Q = 70 - P , MR = 70 - 2 Q . a. AC = MC = 6. To maximize profits set MC = MR. 6 = 70 - 2 Q Q = 32 P = 38 π = ( P -AC) Q = (38 -6) 32 = 1024 b. C = .25 Q 2 -5 Q + 300, MC = .5 Q -5. Set MC = MR .5 Q -5 = 70 -2 Q Q = 30 P = 40 π = TR - TC = (30)(40) - [.25(30) 2 - 5(30) + 300] = 825. c. C = .0133 Q 3 - 5 Q + 250. MC = .04 Q 2 - 5 MC = MR Therefore: 04 Q 2 - 5 = 70 - 2 Q or .04 Q 2 + 2 Q - 75=0. Quadratic formula gives Q = 25. If Q = 25, P = 45 R = 1125
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C = 332.8 ( MC = 20) π = 792.2 14.3 a. AC = MC = 10, Q = 60 - P , MR = 60 - 2 Q . For profit maximum, MC = MR 10 = 60-2 Q Q = 25 P = 35 π = TR - TC = (25)(35) - (25)(10) = 625. b. AC = MC = 10, Q = 45 - 5 P , MR = 90 - 4 Q . For profit maximum,
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Chapter_14_Homeworksol - Chapter 14 Homework (Selected)...

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