Week 6 Chapter 8

# Week 6 Chapter 8 - The top four firms in Industry B have...

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Week 6 Chapter 8 Given the demand curve in the following graph, find (and label) the monopolist’s profit-maximizing output and price. Suppose the demand curve for a monopolists is Qd=500 – P, and the marginal revenue function is MR=500 – 2Q. The monopolist has a constant marginal and average total cost of \$50 per unit. a. Find the monopolist’s profit-maximizing output and price. Qd=500 –P=MR=500-2 P=1000-2Q P=998 b. Calculate the monopolist’s profit. P=ATC P=998 c. C. What is the Lerner Index for this industry? The top for firms in Industry A have market shares of 30, 25, 10 and 5 percent, respectively.

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Unformatted text preview: The top four firms in Industry B have market shares of 15, 12, 8 and 4 percent, respectively. Calculate the four-firm concentration ratios for the two industries. Which industry is more concentrated? Industry A 30 x 25 x 10 x 5 = 37,500 Industry B 15 x 12 x 8 x 4 = 5,760 The following graph shows a firm in a monopolistically competitive industry. A. Show the firms short-run profit-maximizing quantity and price. Is the firm making a profit? B. Carefully explain what will happen in the industry over time, and draw a graph of a monopolistically competitive firm in long-run equilibrium....
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## Week 6 Chapter 8 - The top four firms in Industry B have...

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