EXPLORING ECONOMICS
8th Edition
ISBN: 2818000015614
Author: Sexton
Publisher: SAGE
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Question
Chapter 12, Problem 10P
To determine
(a)
The relationship between a
To determine
(b)
The effect of an increase in the market demand on a perfectly competitive firm's demand curve.
To determine
(c)
The effect of a decrease in the market demand on a perfectly competitive firm's demand curve.
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Use the following table to work Problems 5 to 9.
Minnie's Mineral Springs, a single-price monopoly,
faces the market demand schedule:
Price
Quantity demanded
(dollars per bottle)
10
8
(bottles per hour)
0
1
6
2
4
3
2
4
0
5
5. a. Calculate Minnie's total revenue schedule.
b. Calculate its marginal revenue schedule.
6. a. Draw a graph of the market demand curve
and Minnie's marginal revenue curve.
b. Why is Minnie's marginal revenue less than
the price?
7. a. At what price is Minnie's total revenue maxi-
mized?
b. Over what range of prices is the demand for
water from Minnie's Mineral Springs elastic?
8. Why will Minnie not produce a quantity at which
the market demand for water is inelastic?
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