Suppose a manufacturer creates a product with MC=10. The manufacturer sells the product both domestically and abroad. There is no difference in marginal cost and all conditions necessary to practice price discrimination have been met. The manufacturer is interest in maximizing profits by charging a higher price to consumers abroad. Demand abroad (A) is characterized by the inverse demand curve P = 72 - 2Q. Demand domestically (D) is characterized by the inverse demand curve P = 40 - 3Q. What is the difference in prices between consumers abroad versus those at home ( PA- PD )?
Hint: Round your answer to the second decimal.
Suppose a manufacturer creates a product with MC=10. The manufacturer sells the product both domestically and...
The inverse demand for a product is P=50-0.1Q, and the mc to produce is $10. What is the best pricing strategy for this firm: charging all customers the same price, 2-part pricing, or block pricing?
3. The inverse demand for a product is P-50-0.10, and the MC to produce is $10. What is the best pricing strategy for this firm: charging all customers the same price, 2-part pricing, or block pricing?
3. The inverse demand for a product is P=50-0.10, and the MC to produce is $10. What is the best pricing strategy for this firm: charging all customers the same price, 2-part pricing or block pricing?
The inverse demand for a product is P=50-0.10, and the MC to produce is $10. What is the best pricing strategy for this firm: charging all customers the same price, 2-part pricing, or block pricing?
Please write essential steps and clear writing 2. Assume that a monopolists sells a product in the short- run with a total cost function STC(Q)- 108 125 + 440 Q2 Q >0 The market demand curve is given by the equation P(Q)80- 2Q (a) Find the marginal cost for the firm. (b) Find the profit-maximizing output and price (P", (c) What are the monopolists profits? (d) Does the monopolist want to stay in business? 2. Assume that a monopolists sells...
Consider a model of an upstream manufacturer producing a good that it sells to a downstream retailer for resale. Both the upstream manufacturer and the downstream retailer are monopolists. Inverse market demand for the final good is given by P = 100 - Q. The marginal cost for the upstream firm is 40 per unit of good produced. The retailer faces no costs other than the cost of purchasing the good from the manufacturer. b) Now, suppose that the upstream...
Suppose the inverse demand curve for a commodity in a perfectly competitive market takes the functional form: P (Q) = -.1Q + 10. Additionally, the firm’s marginal cost (MC) takes the following functional form: MC = 4 + 2Q. Recalling that a perfectly competitive firm is a price-taker in the market and its profit-maximizing output level (Qe) is always found by equating its price with its marginal cost: P = MC. Given all this, how much output (Qe) should the...
1) A monopolist firm sells its output in two regions: Califomia and Florida. The demand curves for each market are QF15-PF OF and Qc are measured in 1000s of units, so you may get decimal values for Q. If P-$10 and Q-1, the profit of S10 that you calculate is actually $10,000). Qc 12.5 - 2 Pc The monopoly's cost function is C 5+3Q5+3(QF+Qc) First, we'll assume that the monopoly can only charge one price in both markets. a) Calculate...
Please answer parts F, G, H, I. Thank you in advance MC=5 4. (51 points) The inverse demand function a monopoly faces is P = 100 – Q. The firm's cost curve is TC(Q) = 10 +5Q (a) (3 points) What is the monopolist's marginal revenue curve? TR=(P)(Q) TR=(100-Q)(Q) MR=100-2Q (b) (3 points) What is the monopolist’s marginal cost curve? (c) (3 points) What level of output maximizes the monopolist's profits? MR=MC -> 100-2Q=5 –> Q=47.5 Units (d) (4 points)...
Hints: In problem 11.7 the marginal cost is 20. For both problems it will be useful to know that for a linear demand curve, written with price as a function of quantity (P=0-bQ) marginal revenue is MR=a-2bQ. For problem 12.20, for some steps you will have to re-arrange the demand so to give price as a function of quantity rather than quantity as a function of price. Part a of 12.20 is the same as what we did in the...