ECON 3101 - Intermediate Microeconomics Section: Game Theory 中级微观经济学代考 This section, Game Theory, has 3 questions. Choose two of them to answer. Note, the questions you decide to c...View details
ECON 3101 – Intermediate Microeconomics
中级微观经济学考试代做 This section, Monopoly, has 2 questions. Choose one of them to answer. Note, the question you decide to choose, independently of which,
This section, Monopoly, has 2 questions. Choose one of them to answer. Note, the question you decide to choose, independently of which, is worth 30 points.
Show all your work for full credit. Clearly identify your final answer. Show any relevant calculations neatly.
Question 1 中级微观经济学考试代做
You were hired by a pharmaceutical company to analyze whether it is profitable to enter a business agreement. You are required to spend $5,000 to develop a drug, but then you would be offered a monopoly over the drug production for the first year (in the following years the market would become competitive, with the free entry of firms and the patent would become public, and all firms make zero profits). The inverse market demand for a year is
P(Q) = 600−2Q
The pharmaceutical cost function to produce the drug is:
C(Q) = Q2 +22500
1. Set up the monopolist problem. (Points: 2)
2. What is the monopoly quantity produced and the monopoly price? (Points: 6)
3. What is the monopolist profit (do not forget to include the development fixed cost)? Should the pharmaceutical firm opt to accept the business proposal? (Points: 5) 中级微观经济学考试代做
Imagine now that the government instead of offering the monopoly rights for 1 year, offers to the firm that develops the drug a prize of $6,000, but requires the firm to operate as a competitive firm. Your role now is to determine whether your client should incur the development to operate as a competitive firm.
4. Set up the perfectly competitive firm problem. (Points: 2)
5. What is the equilibrium quantity produced and the market price? (Points: 6)
6. What is the perfectly competitive firm’s profit (remember to include the development fixed cost, and the prize offered by the government)? Should the pharmaceutical firm accept this business proposal? (Points: 5)
7. Explain why the government would have incentives to offer the prize instead of offering the monopoly rights. (Points: 4)
Hint: How much is the consumer surplus in each case?
Question 2 中级微观经济学考试代做
1. Set up the monopolist profit maximization problem. (Points: 4)
2. What are the quantities supplied to each type of consumer, and the respective market prices? (Points: 8)
3. What is the monopolist profit? (Points: 3)
From this point on, assume the monopolist can perfectly price discriminate.
4. Use horizontal aggregation to obtain the aggregate market demand as a qp-diagram. (Points: 6)
5. What are the minimum price the monopolist will charge? (Points: 3)
6. What is the profit of the monopolist under perfectly discrimination? (Points: 6)