Assuming that the four firms do not practice reasoned injury discrimination , the concentration ratio of the four firms is (market serving : 5 :2 :4 :10Here is the interpretical illustration of a monopoly slope an inverse pick out reduce of20 - Q and supply curve is dear the marginal cost of the cost function . therefore , MC 2Q . The monopolist maximize advantage at MR MC . In the case of a monopolists ,MR . In to calculate for the MR , TR (revenue ) must(prenominal) offshoot be determined . TR (20 - Q )Q 20Q - Q2 . MR is the derivative of the TR . Hence . MR 20 -2Q . standard therefore is friction match to 20-2Q 2Q . Equilibrium quantity is couple 5From the graphical record above , the monopolist maximizes profit where MR is affect to MC .
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BecauseMR , slightly of the consumer surplus is converted into the monopolist s profitsThe monopolist is making profit . revenue is the line of business 0PBQ . pay is the area APBC . DWL (Deadweight loss ) is the area BCE apply the point rule , the demand elasticity is equal to - .31 . Using the midpoint manner , the demand elasticity is equal to - .318 . The demand is elastic in natureThe monopolist will charge a price equal to 20 . Q ( is equal to 20 (Using the graph in no .2 ) Welfare effects of a monopolists : PS GAC , CS PBF , DWL BCE . If PCM , the PS GEPpcm , CS FEPpcm , DWL 0...If you want to get a full essay, drift it on our website: OrderEssay.net
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