Homework Answers
Marginal revenue from eleventh bicycle.
Marginal revenue = change in total revenue /change in quantity sold
Total revenue for 10 units =700×10=7000
Total revenue for 11 units =7000+600=7600
Marginal revenue for eleventh bicycle =7600-7000/11-10
=600
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Question 2: Suppose a monopoly firm produces bicycles and can sell 10 bicycles per month at...
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2.Suppose a monopoly firm produces bicycles and can sell 10 bicycles per month at a price of $700 per bicycle. In order to increase sales by one bicycle per month, the monopolist must lower the price of its bicycles by $50 to $650 per bicycle. The marginal revenue of the 11th bicycle is $150. -$50. $50. $7,150.
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coming year. The bicycles sell for $630 each.
An outside contractor makes an offer to assemble 750 of KCSB's
bicycles per month and ship them directly to KCSB's customers as
orders are received from its sales force. It will charge KCSB $155
per bicycle. KCSB would provide the materials for each bicycle, but
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If KCSB accepts the offer,...
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need the solution for all three questions as soon as
possible
Question 1: Hypothetical monopoly costs and revenue Quantity Price Total cost $500 $400 450 650 400 950 350 1,300 300 1,700 NMn using the profit-maximization rule, what should the monopoly price be? Show your work. Question 2: Suppose a monopoly firm produces bicycles and can sell 10 bicycles per month at a price of $700 per bicycle. In order to increase sales by one bicycle per month, the monopolist...
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KCSB expects to produce and sell 2,200 bicycles per month in the
coming year. The bicycles sell for $630 each.
An outside contractor makes an offer to assemble 750 of KCSB's
bicycles per month and ship them directly to KCSB's customers as
orders are received from its sales force. It will charge KCSB $155
per bicycle. KCSB would provide the materials for each bicycle, but
the outside contractor would assemble, box, and ship the bicycles.
If KCSB accepts the offer,...
A firm can sell 10 gizmos when the market price is £40 and can sell 60 gizmos when the market price is £15. The firm faces constant marginal cost of £15, with no other costs of production a) Assuming demand is linear, find the market demand function for gizmos and the associated inverse demand function. b) Determine the price elasticity of demand when the market price is £40. c) Suppose the firm is a monopolist in this market. i.) Explain...
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