Suppose you have a monopolist that has set a price of $4 for a good with a marginal cost of $2.
What is the elasticity of demand of this good?
Suppose you have a monopolist that has set a price of $4 for a good with...
Suppose a monopolist faces the constant price elasticity demand curve: p = Q? where ? < 0. The monopolist has a constant marginal cost of c. a. If ? < -1, can you determine what price and quantity will the monopolist set? Explain. b. If 0>?>-1, what is the price and quantity the monopolist will set?
Suppose that a monopolist is charging a price of $40 and price elasticity is -2. What must the marginal cost of production be? 0 10 20 30 40
Suppose that a monopolist is charging a price of $40 and price elasticity is -2. What must the marginal cost of production be? 0 10 20 30 40
Suppose that a monopolist faces a constant marginal cost of 6 and a constant (firm) elasticity of demand of -2. Using the Lerner Index, what is the monopoly price and what is the mark-up (difference between price and marginal cost)?
15 is E=-1.5. Current 4. a Suppose the elasticity of a certain good at current price level p = monthly demand is D = 5000. (i) If you raise price by 6%, find the new sales price and estimate the resulting demand. (ii) Does your revenue go up or down? How would you have known this even before doing the computation? b. Suppose the daily demand for a good can be modeled by D = 40-2p. (i) Find the elasticity...
Suppose that a firm is selling a good with a marginal cost of $35. Management estimates demand elasticity to be –2. What is the appropriate price to set in order to maximize profit?
9. Suppose you calculate the price elasticity of demand for a certain good and you report that the elasticity 18 V.O. The fact that the elasticity is a positive number means that a. when the price of the good increases, the quantity demanded increases in response. b. demand for the good is elastic. c. you have dropped the minus sign and reported the absolute value of the elasticity d. the good has close substitutes and/or the good is a luxury....
In a market of a certain good, there is a monopolist who has a constant marginal cost c = 8. There are two consumers (i = 1, 2) in this market, and their demand functions are given by p = 20 − 4q for consumer 1 and p = 25 − 5q for consumer 2. Suppose that the monopolist is trying to design an optimal two-part tariff. A. If the monopolist maximizes its profit while it wants to attract both...
A) Suppose a monopoly sells to two identifiably different types of customers, A and B, who are unable to practice arbitrage. The inverse demand curve for group A is PA = 29 - QA, and the inverse demand curve for group B is PB = 19 - 2QB. The monopolist is able to produce the good for either type of customer at a constant marginal cost of 3, and the monopolist has no fixed costs. If the monopolist practices group...
Suppose that a price-discriminating monopolist has segregated its market into two groups of buyers as shown in the table below. a. Calculate the missing total-revenue and marginal-revenue amounts for Group 1. Instructions: Enter your answers as whole numbers in the gray-shaded cells. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Group 1 Group 2 Price Quantity Total Marginal Total Quantity Marginal Demanded Revenue Price Revenue Demanded Revenue Revenue...