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5.14 Fernando has a monopoly on sales of pizzas in the small town of North Key Largo, Florida. Use the following information on the demand for Fernando's pizzas to answer the questions. Price Quantity Demanded $30 25 1 20 2 15 10 4

5.14 Fernando has a monopoly on sales of pizzas in the small town of North Key Largo, Florida. Use the following information on the demand for Fernando's pizzas to answer the questions. Price Quantity Demanded $30 25 1 20 2 15 10 4

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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**Educational Content on Monopoly and Demand** **5.14 Demand Analysis for Fernando's Pizza Monopoly** Fernando has a monopoly on sales of pizzas in the small town of North Key Largo, Florida. This table illustrates the relationship between the price of pizzas and the quantity demanded, which you can use to understand the demand for Fernando's pizzas: | **Price** | **Quantity Demanded** | |-----------|-----------------------| | $30 | 0 | | $25 | 1 | | $20 | 2 | | $15 | 3 | | $10 | 4 | | $5 | 5 | | $0 | 6 | **Description:** - As the price of pizzas decreases, the quantity demanded increases. At a price of $30, no pizzas are demanded. However, when the price drops to $0, the quantity demanded rises to 6 pizzas. - This table exemplifies the basic economic principle of the demand curve, where price and quantity demanded have an inverse relationship in a monopoly setting like Fernando’s. **Application:** - Use this demand information to answer questions about pricing strategies, revenue maximization, and consumer behavior in monopoly markets. Understanding this relationship helps in making informed business decisions and economic predictions.
Transcribed Image Text:**Educational Content on Monopoly and Demand** **5.14 Demand Analysis for Fernando's Pizza Monopoly** Fernando has a monopoly on sales of pizzas in the small town of North Key Largo, Florida. This table illustrates the relationship between the price of pizzas and the quantity demanded, which you can use to understand the demand for Fernando's pizzas: | **Price** | **Quantity Demanded** | |-----------|-----------------------| | $30 | 0 | | $25 | 1 | | $20 | 2 | | $15 | 3 | | $10 | 4 | | $5 | 5 | | $0 | 6 | **Description:** - As the price of pizzas decreases, the quantity demanded increases. At a price of $30, no pizzas are demanded. However, when the price drops to $0, the quantity demanded rises to 6 pizzas. - This table exemplifies the basic economic principle of the demand curve, where price and quantity demanded have an inverse relationship in a monopoly setting like Fernando’s. **Application:** - Use this demand information to answer questions about pricing strategies, revenue maximization, and consumer behavior in monopoly markets. Understanding this relationship helps in making informed business decisions and economic predictions.
c. If Fernando is able to engage in perfect price discrimination, how many pizzas does he produce, and how much profit does he make?
Transcribed Image Text:c. If Fernando is able to engage in perfect price discrimination, how many pizzas does he produce, and how much profit does he make?
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