Q1) Find CV and EV for the following cases:-

a) 𝑈(𝑋, 𝑌) = 𝑋𝑌, PX = 2, PY = 1, 𝑀 = 8, 𝑎𝑛𝑑 𝑝𝑟𝑖𝑐𝑒 𝑜𝑓𝑔𝑜𝑜𝑑 𝑥 𝑐ℎ𝑎𝑛𝑔𝑒𝑠 𝑡𝑜 4

b) U(X, Y) = 2√x + y, PX = 1, PY = 2, 𝑀 = 10, 𝑎𝑛𝑑 𝑝𝑟𝑖𝑐𝑒 𝑜𝑓𝑔𝑜𝑜𝑑 𝑥 𝑐ℎ𝑎𝑛𝑔𝑒𝑠 𝑡𝑜 2

Q2) Suppose a monopoly faces demand P(Q) = 81 − 2Q and cost function

𝐶(𝑄) = 12 + 𝑄 + 3𝑄 2
Find equilibrium Price, Quantity, and Price elasticity of
demand at equilibrium
Q3). A monopoly is selling its product in two markets, market A and market B. In
market A the demand is givenby
PA (QA ) = 50 − 0.5QA

and in market B the demand

is PB (QB ) = 20 − 0.25QB

The total cost of is 𝐶(𝑄) = 𝑄 2 /12

where Q = QA + QB is
the total output.
(a) Find the profit-maximizing prices and quantities and Price elasticity of demand
at equilibrium.
(b) What is the relationship between the price elasticities and the prices charged in
each market?
(c) Find the output in each market if price discrimination is impossible.
(d) Calculate the profits if the firm can successfully price discriminate.

Q4) If the price set by the monopolist is 5 times the marginal cost, what will absolute value of price
elasticity of demand
. Q5)

Q6) . Suppose the market demand function is QD = 200 − 5P and the market supply function is

Qs = 35P.

(a) Find the market equilibrium.

(b) Find the total surplus in this market.

(c) Suppose the government imposes a tax of 2 in this market. What is the resulting deadweight loss?