EBK MICROECONOMIC THEORY: BASIC PRINCIP
12th Edition
ISBN: 8220103612135
Author: Snyder
Publisher: YUZU
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Chapter 4, Problem 4.10P
(a)
To determine
To calculate:The indirect utility function.
(b)
To determine
To calculate:The expenditure function for this case.
(c)
To determine
To show:The compensation required to offset the effect of an increase in the price of
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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?
Chapter 4 Solutions
EBK MICROECONOMIC THEORY: BASIC PRINCIP
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