Monopoly pricing, Business Economics

1. (classical monopoly pricing) A monopolist faces a demand curve q (p) = 100   p:

(a) If its cost function is C (q) = 2q; what is the optimal level of price and quantity?

(b) If its cost function is C (q) = 10+2q (i.e. the rm has a xed cost 10), what is the optimal level of price and quantity?

2. (price discrimination) A monopolist sells bikes in two markets with demand curves given by

 q1 (p1) = 100   2p1; q2 (p2) = 100   p2:

The monopolist has a constant marginal cost c = 20 and has no xed cost. If the monopolist can price discriminate, what price should it charge in each market?

Posted Date: 2/16/2013 12:16:40 AM | Location : United States







Related Discussions:- Monopoly pricing, Assignment Help, Ask Question on Monopoly pricing, Get Answer, Expert's Help, Monopoly pricing Discussions

Write discussion on Monopoly pricing
Your posts are moderated
Related Questions
Capital gains and losses are regarded as wind falls. Fluctuation in the stock market prices in one of the most common sources of the wind falls. In a progressive society accordin

What is the Infant Industry argument? Several governments seek to protect involving industries by premature competition. Infant industries have potential comparative benefit b

What are Harrod-Domar assumptions? The H-D (Harrod-Domar) model assumes as: • Fixed capital output ratio. Nonetheless, diminishing marginal returns to capital element exist

Is agricultural price instability a problem for Less Developed Countries? Problem of agricultural price instability for LDCs: a. Several Less Developed Countries have a com

QUESTION a) Differentiate between price, income and cross elasticity's of demand. b) How can the concept of price elasticity be useful to the owner of a supermarket who want

QUESTION 1 (a) Suppose the government decides to implement a minimum wage to help low-income workers. How will the minimum wage affect the demand for labor and what does this i


Explain how the economic theories applied in business economics

Question: (a) Assume that a market is in equilibrium and all investors agree that the return on any diversified portfolio P is equal to R P = a p + b p 1 F 1 + bp 2 F 2

What are the predictions of dependency theory? The predictions of dependency theory: • DCs exploit LDCs (Less Developed Countries) by extracting their surplus value. Surplu