J. Batts & Co. (JBC) is a small business that is both a monopolist and a monopsonist. It produces...

Question

J. Batts & Co. (JBC) is a small business that is both a monopolist and a monopsonist. It produces bat traps using a rare mineral. JBC is the only producer of these traps and the only purchaser of the mineral. Demand for the company's traps is P = 80 — 2Q, where P is the price JBC charges per trap and Q is the number of traps sold, in thousands of units. Supply of the rare mineral is m = 4 +- 6X, where m is the price of one pound of the mineral and Xis the amount of the mineral purchased, in thousands of pounds. JI3C's production function is Q= 2X, so the marginal product of Xis 2.
JBC should purchase X = thousand pounds of the mineral and pay a price of m = SE per pound. (Enter your responses munded to two decimal places.)
JBC should produce and sell Q = 111 thousand bat traps at a price of P = C. (Enter your responses munded to two decimal places.) Given the optimal values of X, m, Q, and P, the firm will make a profit of SE thousand. (Enter your response rounded to two decimal places.)

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David · Accepted Answer

1.
equate MR= MC
80-4Q=2
Q= 19.5
P= 80-2*19.5= 41
now X= Q/2= 9.75
 m = 4+6*9.75=62.5
profits= revenues- costs = 19.5*41 -62.5*9.75 =190.125=190.12
2.`
B
3.
w= 10
l= 8000
area B
4.
B

J. Batts & Co. (JBC) is a small business that is both a monopolist and a monopsonist. It produces bat traps using a rare mineral. JBC is the only producer of these traps and the only purchaser of the...

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