Quiz11_F10_Key - b. (2) Graph the above situation and...

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3550 Quiz11 F10 Last Name: ______________ First Name:___ The Denton Oaks Golf Club (DOG Club) is the only golf course in Denton County and as such has monopoly power with demand of: P = 200-2Q. Their Marginal Cost of providing a round of golf is $20. a. (4) What are the DOG club’s profit maximizing price and quantity? MR=200-4Q & MC=20 Profit maximizing Q M can be found where MR=MC Î 200-4Q=20 Î 180=4Q Î Q M =45 P M =200-2*Q M =200-90=110
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Unformatted text preview: b. (2) Graph the above situation and indicate the profit maximizing price and quantity for DOG Club. 110 20 MC 45 90 M R c. (2) Find the socially desirable output level (or the efficient output level). Social Optimal Level of output QO can be found where MB=MC Î P=MC 200-2Q=20 Î Q O =180/2=90 d. (2) Calculate the deadweight loss associated with this monopoly. DWL=Yellow Area=0.5*(110-20)*(90-45)=0.5*90*45=2025...
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