A firm is a profit-maximizing monopolist in the market of a patented computer software. As an economic analyst, you observe the following data: a) The monopoly’s price is set at $50 per copy. b) The monopoly’s total revenue is $300,000. c) The monopoly’s marginal cost at the profit-maximizing quantity is at $30 per copy. Based on the observed data, please determine the linear inverse demand function. Fill in the blanks. Suppose the inverse demand function is of the form where a, b are both positive constants, determine the value for a: 1 and b: 2 .
A firm is a profit-maximizing monopolist in the market of a patented computer software. As an economic analyst, you observe the following data: a) The monopoly’s price is set at $50 per copy. b) The monopoly’s total revenue is $300,000. c) The monopoly’s marginal cost at the profit-maximizing quantity is at $30 per copy. Based on the observed data, please determine the linear inverse demand function. Fill in the blanks. Suppose the inverse demand function is of the form where a, b are both positive constants, determine the value for a: 1 and b: 2 .
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
A firm is a profit-maximizing monopolist in the market of a patented computer software. As an economic analyst,
you observe the following data:
a) The
b) The monopoly’s total revenue is $300,000.
c) The monopoly’s marginal cost at the profit-maximizing quantity is at $30 per copy.
Based on the observed data, please determine the linear inverse
Fill in the blanks. Suppose the inverse demand function is of the form
where a, b are both positive constants, determine the value for a: 1 and b: 2 .
Hint: a should be an integer, the answer for b should round to four decimal places.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education