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  4. A monopolist faces linear demand p = a - bq and has cost C = cq + F, where all parameters are positive, a > c, and (a - c)...

A monopolist faces linear demand p = a - bq and has cost C = cq + F, where all parameters are positive, a > c, and (a - c)^2 > 4bF. (a) Solve for the monopolist's output, price, and profits. (b) Calculate the deadweight loss and show that it is positive.

«A monopolist faces linear demand p = a - bq and has cost C = cq + F, where all parameters are positive, a > c, and (a - c)^2 > 4bF. (a) Solve for the monopolist's output, price, and profits. (b) Calculate the deadweight loss and show that it is positive.»
  • Микро-, макроэкономика

Условие:

A monopolist faces linear demand p = a - bq and has cost C = cq + F, where all parameters
are positive, a > c, and (a - c)* > 46F.
(a) Solve for the monopolist's output, price, and profits.
(b) Calculate the deadweight loss and show that it is positive.


реши и построй график для пункта b

Решение:

To solve the problem, we will first derive the monopolists output, price, and profits in part (a), and then we will calculate the deadweight loss in part (b). (a) **Monopolists Output, Price, and Profits** 1. **Demand Function**: The demand function is given by p = a - bq. 2. **Cost Function**: The cost function is C = cq + F, where c is the marginal cost and F is the fixed cost. To find the monopolists output, we need to determine the marginal revenue (MR) and set it equal to marginal cost (MC). 3. **Total Revenue (TR)**: TR = p * q = (a - bq) * q = aq - bq^2. 4. **Marginal Revenue (...

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