Home » Consider a small, isolated town in which a brewery faces the following inverse demand: P = 15 – 0. The total cost of producing beer is \$Q. First…

# Consider a small, isolated town in which a brewery faces the following inverse demand: P = 15 – 0. The total cost of producing beer is \$Q. First…

Consider a small, isolated town in which a brewery faces the following inverse demand: P = 15 –

0.33Q. The total cost of producing beer is \$Q.

a. First assume, the industry is competitive. What quantity will be traded?

b. From now on, assume the brewery is the monopoly. Solve for the brewery’s profitmaximizing

output and price using calculus.

c. Calculate the producer and consumer surplus and the deadweight loss from market power.

d. If it were possible to organize the townsfolk, how much would they be willing to pay the

brewery to sell beer at a price equal to its marginal cost?

e. What is the minimum payment the brewery would be willing to accept to sell beer at a price

equal to marginal cost?

f. Is there potentially a bargain that can be struck between the townsfolk and brewery? What

would the deadweight loss be if such a bargain were struck?

## Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

# Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

### Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

### Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

### Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.