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).

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Expert Solution

Rahul Sunny answered 2 years ago

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