Microeconomic Theory
12th Edition
ISBN: 9781337517942
Author: NICHOLSON
Publisher: Cengage
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Question
Chapter 14, Problem 14.5P
a)
To determine
To find:
Output level, price and profit earned by monopolist.
b)
To determine
To know:Output level, price and profit earned by monopolist.
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Students have asked these similar questions
Acme is a monopolist for a good with inverse demand P = 4000 – 6Q, where P is the price in
dollars and Q is the amount sold. Acme's variable costs are TVC(Q) = 4Q². With these
functions, the marginal revenue is MR(Q) = 4000 – 12Q and marginal cost is MC(Q) = 8Q.
a) If Acme has no fixed costs, what is its profit maximizing price?
b) If Acme has non-sunk fixed costs of $700,000, is it worth operating or should they shut
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Consider a monopolistic market with demand function:
P = 36 – 0.5Q
The monopolist’s marginal cost (MC) and total cost (TC) function are:
MC = $2 TC = 4 + 2Q
How much total economic profit does the monopolist earn?
You are the manager of a monopoly. A typical consumer’s inverse demand function for your firm’s product is P = 250 − 40Q, and your cost function is C(Q) = 10Q. a. Determine the optimal two-part pricing strategy. b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per-unit price?
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