EBK ESSENTIALS OF ECONOMICS
7th Edition
ISBN: 8220102452107
Author: Mankiw
Publisher: CENGAGE L
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Chapter 14, Problem 2QCMC
To determine
The relationship between
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You are the manager of a monopoly, and your analysts have estimated your demand and cost functions as P = 300 − 3Q and C(Q) = 1,500 + 2Q2, respectively.
a. What price-quantity combination maximizes your firm’s profits?
Price:
Quantity:
b. Calculate the maximum profits.
$
c. Is demand elastic,
inelastic
unit elastic
Elastic
d. What price-quantity combination maximizes revenue?
Price:
Quantity:
e. Calculate the maximum revenues.
$
f. Is demand elastic, inelastic, or unit elastic at the revenue-maximizing price-quantity combination?
multiple choice
Elastic
Unit elastic
Inelastic
Draw the graph. If the monopoly is a doing perfect price discrimination, then:
the monopoly produces a quantity Q = ______ where ________________ (which curves intersect?)
the monopoly charges a price of ________ (trick question!!!!)
the consumer surplus is CS = ______.
the producer surplus is PS = _________(identify the area on the graph and calculate it).
this monopoly ________ (is / is not) efficient because ______________________.
P,
MR,
AC,
MC
B
A
Demand
G
|
JH
MC
AC
MR
Quantity
a) Identify the quantity of output the monopoly wishes to supply and the price it will charge.
b) Suppose demand for the monopoly's product increases dramatically shifting it to the right.
Using the new demand curve determine what happens to the marginal revenue as a result of the
increase in demand? Assuming that the marginal cost curve stays the same. how will the new
profit-maximizing quantity and price change?
Chapter 14 Solutions
EBK ESSENTIALS OF ECONOMICS
Ch. 14.1 - Prob. 1QQCh. 14.2 - Prob. 2QQCh. 14.3 - Prob. 3QQCh. 14.4 - Prob. 4QQCh. 14.5 - Prob. 5QQCh. 14 - Prob. 1QRCh. 14 - Prob. 2QRCh. 14 - Prob. 3QRCh. 14 - Prob. 4QRCh. 14 - Prob. 5QR
Ch. 14 - Prob. 6QRCh. 14 - Prob. 7QRCh. 14 - Prob. 8QRCh. 14 - Prob. 1QCMCCh. 14 - Prob. 2QCMCCh. 14 - Prob. 3QCMCCh. 14 - Prob. 4QCMCCh. 14 - Prob. 5QCMCCh. 14 - Prob. 6QCMCCh. 14 - Prob. 1PACh. 14 - Prob. 2PACh. 14 - Prob. 3PACh. 14 - Prob. 4PACh. 14 - Prob. 5PACh. 14 - Prob. 6PACh. 14 - Prob. 7PACh. 14 - Prob. 8PACh. 14 - Prob. 9PACh. 14 - Prob. 10PACh. 14 - Prob. 11PA
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