Question
In: Economics
Suppose a monopolist sells its good to three people. Each person can only purchase one good....
Suppose a monopolist sells its good to three people. Each person can only purchase one good. The first person is willing to pay $20 for the good, the second person is willing to pay $18, and the third is willing to pay $16. These three people make up the entire market for this monopolist. If the firm can perfectly price discriminate, how much revenue can it earn from selling 3 units?
| $48 |
| $60 |
| $54 |
| $16 |
| $12 |
Which of the following is true of the relationship between price and marginal cost under monopolistic competition?
| P = MC at all levels of output |
| P = MC only at the profit-maximizing quantity |
| P > MC at the profit-maximizing quantity |
| P < MC at the profit-maximizing quantity |
| P < MC at the quantities below the profit-maximizing quantity |
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
1.A single-price monopolist is a monopolist that sells each unit of its output for the same...
1.A single-price monopolist is a monopolist that sells each unit
of its output for the same price to all its customers. At its
profit-maximizing output level, the single-price monopolist
produces where price is ___________ than marginal cost because for
it price is __________ than marginal revenue and its demand curve
lies __________ its marginal revenue curve.
less; less; below
greater; greater; above
greater; greater; below
less; less; above
greater; less; below
2.
Exhibit 2
Quantity Sold
Price
(units)
Total Cost...
Suppose that there is only one firm, the monopolist and many consumers in the market. Assume...
Suppose that there is only one firm, the monopolist and many
consumers in the market. Assume that the market demand function is
given by P = 210−2Qd and the monopolist’s cost function
is given by C(Q) = 10Q.
(a) Setup the monopolist’s profit maximization problem.
(b) Solve the monopolist’s profit maximization problem and find the
market equilibrium price P∗ and quantity Q∗.
Now, assume that the government eliminates all the entry cost of
entering the market
as the government wants...
1.) A monopolist sells its good in two markets denoted by N and S. The demand...
1.) A monopolist sells its good in two markets denoted by N and
S. The demand for the good in market N is PN = 100 − QN. The demand
for the good in market S is PS = 60 − QS. The marginal cost of
producing the good is $20. For your calculations below assume zero
fixed costs. a (15). Derive the monopolist’s two-part pricing
scheme that allows 1st-degree price discrimination. Provide the
fixed fee, the per-unit price, and...
Suppose 200 people are lined up side-by-side, each one holding a fair coin. Each person flips...
Suppose 200 people are lined up side-by-side, each one
holding a fair coin. Each person flips their coin 64 times; every
time it lands heads they step 1 meter forward, each time it lands
tails they step 1 meter backward. Use a normal approximation to
answer the following question: after everyone finishes their 64
steps, approximately how many people will be standing between 4 and
8 meters behind the starting line? (Round your answer to three
decimal places. Example: if...
Suppose 200 people are lined up side-by-side, each one holding a fair coin. Each person flips...
Suppose 200 people are lined up side-by-side, each one
holding a fair coin. Each person flips their coin 64 times; every
time it lands heads they step 1 meter forward, each time it lands
tails they step 1 meter backward. Use a normal approximation to
answer the following question: after everyone finishes their 64
steps, approximately how many people will be standing between 4 and
8 meters behind the starting line?
Suppose a monopolist charges a price of $27 for its product and sells 10 units at...
Suppose a monopolist charges a price of $27 for its product and
sells 10 units at that price. At 10 units of production the firm
has average fixed cost equal to $10 and average variable cost equal
to $12. How much total profit is the firm earning at this price?
(show your work)
1) Suppose a single-price monopolist is selling more than one unit of a good for a...
1) Suppose a single-price monopolist is selling more than one
unit of a good for a price of $19.95. Of the following choices,
which is true?
The marginal revenue of that unit must be less than $19.95
The marginal revenue of that unit must be $19.95
The marginal cost of that unit must be $19.95
The average cost of that unit must be $19.95.
2) BenFrank LLC is a monopolist that can sell 8,000 units of
SKU972 at a price...
Suppose 4 people each start with $10. In each of 2 periods, each person flips a...
Suppose 4 people each start with $10. In each of 2 periods, each
person flips a coin (50% probability of heads or tails).
a. Suppose that each time a person flips heads, their wealth
increases by 70%. If they flip tails, their wealth decreases by
30%. On average, what fraction (or percentage) of the total wealth
would you expect the richest person to have in each period? (Show
how you calculated the answer.) (1 pt)
b. Now, repeat the exercise...
Suppose that there are only three people that live in a (very) small town: Eric, Greg,...
Suppose that there are only three people that live in a (very)
small town: Eric, Greg, and Katie. The town is thinking of building
a park which you can assume is a public good for these three
individuals in the town. Based on the individuals’ demand schedules
for the park, which are given below, calculate and graph the social
marginal benefit curve for the park.
Eric’s Demand
Greg’s Demand
Katie’s Demand
Price per Acre
Number of Acres
Price per Acre...
In a certain economy that produces only one good, corn, people live two periods and seek...
In a certain economy that produces only one good, corn, people
live two periods and seek to maximize the logarithmic utility
function U = ln (C1) + ln (C2). There are 10 people. Each has after
tax real income of 35,000 bushels in period 1 and 156,000 bushels
in period 2. Business investment demand is 100,000 bushels of corn
no matter what the real interest rate is (so the investment
schedule is a vertical line).
A. Find period 1 saving...
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