Quiz 19 Monopoly - arising from this monopoly. (c) Suppose...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Shomu Banerjee ECON 201 MONOPOLY Trygve is a monopolist with a cost function given by C ( Q ) = 72 + 100 Q + 1 2 Q 2 facing an inverse market demand curve P = 700 - Q. It’s marginal cost is MC = 100 + Q . (a) Find his profit-maximizing price and output combination, P * and Q *, and his profit Π *. (b) What is the socially desirable level of output? Calculate the deadweight loss
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: arising from this monopoly. (c) Suppose the government decides to tax 30% of the monopolist's profit (a corporate tax ). Will he produce more or less than before? Give an economic explanation for your answer!...
View Full Document

This note was uploaded on 10/26/2010 for the course ECONOMICS ECON 201 taught by Professor Dr.shomubanerjee during the Summer '07 term at Emory.

Ask a homework question - tutors are online