Monopoly, Price Discrimination, and International Trade: An Economic Analysis
A detailed analysis of monopoly structures, price discrimination, and global trade impacts.
David Rodriguez
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Monopoly, Price Discrimination, and International Trade: An Economic
Analysis
Part A
1) As per the above question, the Futures Unlimited Corporation has invented the engine of
rocket car. As an inventor it is currently enjoying an exclusive patent of the service. Only
this firm has the exclusive right to control and distribute the quantity of this certain
isotope of plutonium on the market. Thus it is enjoying a monopoly. Therefore the firm
will maximize its profit.
The profit maximizing behavior of a monopolist is given below:
Profit (π) = Total Revenue (TR) – Total Cost (TC)
= P×Q – TC
According to the FOC of profit maximization, we get
= - [Here P is not fixed]
= MR – MC = 0
Therefore MR = MC
Analysis
Part A
1) As per the above question, the Futures Unlimited Corporation has invented the engine of
rocket car. As an inventor it is currently enjoying an exclusive patent of the service. Only
this firm has the exclusive right to control and distribute the quantity of this certain
isotope of plutonium on the market. Thus it is enjoying a monopoly. Therefore the firm
will maximize its profit.
The profit maximizing behavior of a monopolist is given below:
Profit (π) = Total Revenue (TR) – Total Cost (TC)
= P×Q – TC
According to the FOC of profit maximization, we get
= - [Here P is not fixed]
= MR – MC = 0
Therefore MR = MC
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Subject
Economics