11. Problems and Applications Q5 Consider the relationship between monopoly pricing and price elasticity of demand. If demand is inelastic and a monopolist raises its price, total revenue would . Therefore, a monopolist will 10 9 8 Use the purple segment (diamond symbols) to indicate the portion of the demand curve that is inelastic. (Hint: The answer is related to the marginal- revenue (MR) curve.) Then use the black point (plus symbol) to show the quantity and price that maximizes total revenue (TR). ? 7 6 5 4 3 2 1 0 -1 -2 -4 -5 0 Demand 1 2 3 4 5 Quantity 6 Marginal Revenue and total cost would produce a quantity at which the demand curve is inelastic. 7 8 9 10 Inelastic Demand. + ,, causing profit to Max TR

11. Problems and Applications Q5 Consider the relationship between monopoly pricing and price elasticity of demand. If demand is inelastic and a monopolist raises its price, total revenue would . Therefore, a monopolist will 10 9 8 Use the purple segment (diamond symbols) to indicate the portion of the demand curve that is inelastic. (Hint: The answer is related to the marginal- revenue (MR) curve.) Then use the black point (plus symbol) to show the quantity and price that maximizes total revenue (TR). ? 7 6 5 4 3 2 1 0 -1 -2 -4 -5 0 Demand 1 2 3 4 5 Quantity 6 Marginal Revenue and total cost would produce a quantity at which the demand curve is inelastic. 7 8 9 10 Inelastic Demand. + ,, causing profit to Max TR

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q20 With regard to price discrimination, we can generally say that a monopolist practicing perfect price discrimination _____ a single-price monopolist in the same market. a. Produces the same output level and charges the same price as. b. Produces a lower level of output compared to. c. Generates more consumer surplus than. d. Generates a more efficient outcome for society as a whole compared to. e. Has the same effects on consumer welfare as.
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1 Suppose that a monopolist has a patent for widgets and the market demand curve Q(P) is:Q(P) = 60 – 2P,where P is the price in dollars and Q is quantity. a. Solve for the inverse demand P(Q) curve by solving the demand curve for P in terms of Q. b. Using your answer from (a), express the monopolist’s total revenue in terms of Q as TR(Q) = QP(Q). c. Calculate the monopolist’s marginal revenue MR(Q) by differentiating the total revenue you found in theprevious step: MR(Q) = dTR(Q) / dQ. PLEASE SHOW ALL WORK
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The diagram at right shows the demand curve, marginal revenue curve, and cost curves for a single-price monopolist that owns the only golf courses on Eagle Island. The monopolist's product is 18-hole golf games. a. Now suppose the monopolist is able to charge a different price on each different unit sold. What would be the total number of rounds of golf sold per week? rounds. (Round your response to the The total number of rounds sold per week is 600 nearest whole number) What would be the price on the last round sold? The price on the last round sold is $200 (Round your response to the nearest dollar) b. What is the value of the consumer surplus if the monopolist cannot price discriminate at all? The value of the consumer surplus is $ 40000 (Round your response to the nearest dollar) c. What is the value of the consumer surplus when the monopolist is practicing this "perfect price discrimination? The value of the consumer surplus is $ (Round your response to the nearest dollar) Price…
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