Markup over price= - 1/e
P-MC/P= -1/e
Markup of local hardware= 1/1.5= 0.67
Markup of video market= 1/4= 0.25
Thus video market has higher markup.
4. The elasticity of demand in the local hardware industry is -1.5, while in the video...
4. The elasticity of demand in the local hardware industry is-1.5, while in the video market it is -4. Which industry has a higher markup over marginal cost (as a percentage of price)? In answering, calculate the markup for each. 5. The local botled water supplier sells water for SO.50 per gallon, while marginal cost is S0.20 per gallon. What is this firm's degree of monopoly power, as measured by the Lerner index? 6. What is a network externality? And...
3. The zoning rule is revoked, and the monopolist in problem 2 can no longer exclude others from using the same technology and producing boxes, so the market structure changes from monopoly to perfect competition. (That is, assume that all firms are price-takers and that they produce at minimum average cost in equilibrium.) (a) What will the market price and quantity be? (b) Calculate consumer's surplus under this market structure (c) Calculate aggregate producer profits and producer's surplus. (d) Comparing...
2. A monopolist has a cost function given by TC 250+q+.004q. The inverse market demand for boxes is given by p 8-.0010. The monopolist is curranty able to exclude rivals from the market becaus of a spocial governmental zoning rule (a) What is its output and what price does it charge for boxes? (b) Calculate the firm's profit at this output level. (c) Calculate the firm's producer's surplus at this output level. (d) Calculate the consumer's surplus in this situation....
The industry price elasticity of demand for good X is −1.5. The price elasticity of demand for the output of an individual firm producing good X in this industry −9. From this we can conclude that: individual firms have significant market power. the HHI for this industry is 1,667. this industry is highly concentrated. None of the options. individual firms have little market power.
Firm A has price elasticity of demand of –1.5 and a marginal cost of $30. Firm B has a price elasticity of demand of –2.0 and a marginal cost of $30. What is the profit maximizing price of each firm?
The industry elasticity of demand for gadgets is -2, while the own-price elasticity of demand for an individual gadget firm's product is -6. What is the Rothchild Index ?
Suppose that the local hardware store has a monopoly on screwdrivers. The market demand is given by P = 33 – 0.25Q and the marginal revenue is MR = 33 – 0.5Q. The marginal cost of selling screwdrivers is MC = 1 + 1.5Q. What is the profit-maximizing price the monopolist should charge for the screwdrivers and how many will they sell? Price: $ Quantity: screwdrivers
A Cournot oligopoly has four firms in the industry. The market price elasticity of demand is -2.5 and the marginal cost of production is $200. What is the profit- maximizing price, rounded to the nearest dollar? $500 $222 $354 More information is needed to answer this question. $208
A Cournot oligopoly has four firms in the industry. The market price elasticity of demand is -2.5 and the marginal cost of production is $200. What is the profit maximizing price, rounded to the nearest dollar? O $200 O $500 5354 $222 More information is needed to answer this question
5. The price-elasticity of demand for a tub of popcorn at Minges-Coliseum is Ep = -1.5. The marginal cost of a tub of popcorn is $1. What is the profit maximizing price of a tub of popcorn? 6. The price-elasticity of demand for leisure rail travel is Ep = -1.52. The price of a round-trip ticket for one passenger on Amtrak from Wilson to Miami this spring break is $157. Calculate the marginal cost to Amtrak of this trip?