Suppose a monopolist faces a demand curve given by p(y) = 1/y^2 . (a) Write down...

Suppose a monopolist faces a demand curve given by p(y) = 1/y^2 .
(a) Write down the monopolist's total revenue as a function of y.
(b) Find the monopolist's marginal revenue as a function of y.
(c) Find the demand elasticity for this demand curve. Note that this is a demand curves
where the elasticity is the same at all points. (You can get rid of all variables and find
the elasticity as a single number.)
(d) Suppose the monopolist's marginal cost function is positive for all values of y (as most
marginal cost functions are). We will we not be able to find a point that maximizes
prots for the monopolist. Why is this the case? You can explain this using the
marginal revenue curve or by using your answer from part (c).

Expert Solution

Rahul Sunny answered 2 years ago

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