An amusement park has identified its demand functions as follows: Q = 50-3P The marginal operating cost of each unit of quantity is $5 and there are no fixed costs. The park is a monopolist and exercises significant price making power in the market. 1. If the monopolist charges same price for every unit, for what price are his profits maximized? How many units will be sold at that price? What are his total profits?
An amusement park has identified its demand functions as follows: Q = 50-3P The marginal operating cost of each unit of quantity is $5 and there are no fixed costs. The park is a monopolist and exercises significant price making power in the market. 1. If the monopolist charges same price for every unit, for what price are his profits maximized? How many units will be sold at that price? What are his total profits?
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter14: Indirect Price Discrimination
Section: Chapter Questions
Problem 6MC
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