Mins. to the gues: no. 4 (i) Q) Given, @ = 300 P4 Q, = 400-2Pa Cost function, TC = 5000 + 100Q and Q = TQ. (a) With Prica Disenimi nations — From (0D, Q,- 300 = - Pa =p P4 = 200-Q, TL Mulk ai both sides Py CD 4 a P4 = 200-Q From (a)5 Q, -400=- 2. => 2Pg =400- Q2 Emu liply ng oe tdes (-l 2h=40 qQ “8 1 on Pa = A00- 0,502 Lbividing pot . aided PY 27]Now, P, = 300-@,~ Pa =200-0,5Q, we know, TR= PXQ ot TR, = PjXQ) = 800-@))& = 300Q,~ 1” TR2 =P XQq = (200-2 5Q2 )Q =A00Qs 0.50” MR, =dlTR)) = 300-20, dQ, : Me = aT) _ 200- G2 dQ , Given, TC = 5000+ 100 & MC= alt) _ joo aa pt maxirat zing condition for We. know, pro monopoly, M R=MCe. Accor cl ng jo the question, MR, = MC p 300-2 =100 =a —aar= \00- 300=D - 2Q, = 7200 ag =p 2Q,=200 am = 200 Sa 25 = 100 “Bs =9(200 = 100) = $200 Me! > MR’ MC =!00 Mc’=0 07-8 MR, = 30-2Q, MRI Fo The required quantity @ ~400 should ba. produced $200 to * maaxien ize preobit in at price 1 8= domestic monkets. , Again, ME =e 9, =200- 045(100) =p 300- Q2 =109 = \50 > -Q.= joo- 200 : =p —Q2 57 joo +!a@, =10°2nd Order Condition * ES a7 ~ _ Mc’ S MPS, =p Me 100 0>-4 “Mel =O ME = 200-Q2 Mee = - The. rerquirced Quantity 1Go2 = toounits should be Produce cb price Qa = $I5O do inayiniize “profit. ob) without Discrimination + Q=Q) +O, = 300-P + AM-QP [P, =P, =P J =) Q = %00- ap =P -2P =-Yoot Q ahs WO-Q_ [Multiplying beth siden, Dp= FO _@ “by CN] 2 3 “P= YOL -0,3 Ty ~ 0-338TR=P _ oy - Pxa = (2ge - 0290) = YOO g ~0.33Q7 s Mp = alte) yoo — 0.668 AQT SS condition, MR=MC For pro-t maximizing FOO _ 666A =!00 =) sp -0.66 Q = [007 yoo |. =D —0-66Q = 200-700 ie i) = E0.b6%3)Q = -400 = Raq = 400 1. Q= 400/72, = 200 Po = x00 _ 0.33(a00) = 416433 and Ordert. Conditions Ma’ 7MR’ Me= 100 MR = 709 _ 0.66Q 2 Mc! =0 Mpl= — 0.660> -0.66 The required quant rly Qs 200 unlt & should be produre od) ak Peica, Po = 9167. 33 to maximize prropit. Lit) TR = TRytTRa = Cfo %Qor) + (Par X@or) With Disertiminadion (Piro =Ca00KIOD + (150K 100) = 20000 + 15000 = $ 35000 = 5000+ 1008 = 5000+ 100(Ro + Qo2) ie = 5000+ 100C }00+ 100) — 5000+ }@(200) = $4000 Probl. = ics -TC = $35000- $25000 = 410000 Withoak discnimination \CProbit), TR = PoX8o = C16. 33) X200 = $33466TC = 5O0d+)O0Q = 5000 +1006 20Q) = $5000 = 5 Profil, w= TR-1C = F 33466 — 425000 = $8466 Cleoaly » without discrimination produce is pacing lone prot 1 0 Pro wise of the, produtag to price discrimiadz. Ce) Tr A unit of ovtput tax ib TKE © Tn Qunits ofoutpt ' | Th 8Q The new cost function: qe = 5000+ YOO Q*+SR = 5000+ )OR® Men Mea d(T _ qa = 10% Q= QtQe = JOOrP+ 40-2P cA=R=P7 Q = yoo-3P 24 PS xo — 0+ 33Q ’ TR =PXQ = (ze - Os 33R)Q = 00 9 0.54na MR = d(TR) — xo “aq 0. — 0.66Q fore picofit smn i 2 ing conadliony MR= Me > is _ 0.66Q =108 = oO =D - 0.068 = 108 30° =p (0.06% 38 = 324-%X00, : be =D -AaQ = 336 a =188 o = 22 BR = 700 — 0.330182) =$4721.29 2 Qnd ortdare Condition * ee , ZMe MC=!08 pee! MR le Mc’=O 6. = - 0.0660 MR = 200 _o.aeq MR’ =~ 0.66The vee quired quantity and price Should be pred : © produrcd, Profit, 1 = TR-It = bk) - (5a04 108 & = Gt, a9 xI98) - (5m0+ 106 (188) 3 = §(G2202,52 -25 304) = £ 64%. 52 So from (b). wh case, the price has been inaeased 105 Pl = BCIF 29 “16% 33) = $396 and profit hes been fall down to, T'ef(Z466- 6898.5) =F 156% 4g rans] uyAns. to the quos.no. 2 (a We know, at oquibrtilivn aondition, Treo = Ex pend tune Y=CtIta > y= (2% +b) +I+Q © Y= a(¥-T)+b+rITetQ* LGeieny =p y <0 (¥-TH Ft TFT OX =p y =ay-aT* +b tit +4 =p y-aY = p-aTt +1* $G% > yta) = (braT® 47% tof) iN ye 4 (p-at* tf tat) ce [Showed 1]Ob), Prom (a) wo gee , ye beaT+1% ta* d-a = b__ at® ee Gk wa ga te Ta Govern nent y 3 + oF pxpanditue Soe - 2a pb ote hoe ot) Multiple? 9 a0 “age ra Ia = t 1-4 (riven, O4aS4, a8 F will be always smallut than, 40 (4-0) will be always positive. 50H ints ISLS byt unit, if goon ment oxpenditur pr pn eve eS by that “ aqui biti liven valutof tne! 4 unit S- 4-aTaxation 9y a i a nd ae) & & e ratiptts, OTF ars(qe ~ Me + HO pe = -a 1-0 Ms, O24, (doa) will be positive, but wrth Ea) at the nunutabr the “whole Lup messi n’ with be negate « |e, por 4 unit Pneroass of tox ation, equibriiliwn valur ol- tncome will docraase by Le warts. ‘ Vinge to' the. Ques» 10,.3 _ Q Giver, re = ag? FAQ Pies t dere vedivey lot ud findTr’ = -4Qtl4 Now » finding He pools G the deri voclive, —4at l4=0 =p Q =_14 7 %, = 3.5 To seo the monotonocity changt ) lot us ke num ber 5 gracdar than 3-5 and /es5 than 3.5 Tr! (45) = -4(4.5) +14 = -I1@4+l14 -4<9 TR'C25) = —A (2.5) +14 . ~--o¢ 4 = 4279 go, TR(Q) % monotonocalbey Premasiry ot Q <3,.5 and monotonocal, dooreasing fon @ 73.5.(2) Te =aa +10 ket tet us take Hs. first danivadi wo, Te! =300 a A, i As there ip no a monotonectty Cannot be detenmined hire. &) Ac=até +190 =QtG +00QT Wet us Find the. firtet dupivoti ve , Act = 1A). -{t0oten 1007!" = d- 100 Q~* cde 303 wt us tind the ot of the drivetive, joo -0 =p Q*=100 Q? joozo @= +i00 =p Q* =t10As-Q==t0-tH a jist pesst bea-b ~ Deltas, . cap not —be—veqad Lia) Aare ity .. Q = -10 »4° htt us take numb. 4amallov than E10) , belwien —41o ond 4O ard greater than JO 7 cheek the monotone cH y+ Act Cul) = 4 10° ci) En) - i- 100 = yad-l0o jal Tat = ait == 70 ae’ (s)2 47 100 vax” . 6) 95-1000 = = q 2 35 2 = a5 AS 2 = I- Jef = 4007100 — 500 ieee ‘Goo zooThus ACCQ) id monotonocally decreasing fow ~106Q Zon monotonically increasing for Q 4-10 and art, @ 710,, @) Te= 0.19? -2Q2 +608 +200 hot us find the finst denivative , Te’ = dee) = 0302-42 t60 hat us find the roots of tht denivadive , 0.aQ2 -Aa +60=9 ca ED DODD =D a = 2X0.3) = ARNE 8 At ae 0.6 i — 3 J=56 not possible « Monotonocity cannot be determined in Pris case.Ans.to the guas.no.4 Given, Q, = eee +YG Oni ace APN AY pquibitiliure aondition , aae% ap of- pP+ Yo 2-5 toP-fN =D _pp-oP = 6 ~% ~Ya-fN =p -e( P+8) = — (stat Ya- -N) => pcpr® = (grat Jak) pk parton KN (p+8) Now, putting value of - in Qao We get aquibr! iw. quardity »Q at = x PL tet Yo tsn) Yon pte ~ tPAN) _ Ya - &-(P pa tape peneen peace —PS KH PIA Pan 4 pre + OV pt+o 7 — ka - PE- REN FORM eatin si pro Qe = x0 —ph- pAN FORE p+e From P® we can: write » pt =< g aw _ Ya + KN r pre + pre Tprs pre ape. = A aN pre . / tiven , BP»? KL > 0, as numerator and denominator both ba2ing postive, Lhe le oxpreesion is postive and with who at in price of inputs 4 anit inenende P F inp (wD, the aque bplliven peice PF will Inemasg eeby . yi pte untts. Epon Ge we can waite, ps pen , 0% Qt = ap, = + pre pro pto pre aQe _ pK —_—_—— = ao an pre as the ib® nagacive sign Giver } e, £8 yaks ae pra6lor- will be at the pamostactor go the whole 2 ive. a jncreease IM prci¢e of inpuds CN), | decroasl by iiwe quondity Qk wil__vins.dothe ques nob 0 poorast 7.0} populadi (b) The graph dapiels that , population pons BY Of the aconomy ‘s 157 OF poorest Income,fe) The new policy» { ve will shift upwand: ov lo% tax on the richest, the Cur 10 IS 100 poorest “of population