How much should the firm charge for this package

Reference no: EM13199567

A monopoly is considering selling several units of a homogenous product as a single package. A typical consumer's demand for the product is Q^d = 50 - 0.25P, and the marginal cost of production is $120.

a. Determine the optimal number of units to put in a package.

b. How much should the firm charge for this package?

Reference no: EM13199567

Questions Cloud

Analyse the banks liquidity risk situation : Determine and analyse the banks liquidity risk situation, between 2010 and 2011, by using traditional liquidity ratio analysis, and evaluate its potential change with respect to the new Basel 3 approach of liquidity

What is the meaning of a four-firm concentration ratio : Interpret what a score of 90% would mean for the four-firm concentration ratio. What are the shortcomings of concentration ratios as measures of monopoly or oligopoly power. What is the meaning of a four-firm concentration ratio.

Methodologies in terms of market risk evaluation : Value-at-Risk (VaR) is defined as the probability of suffering a loss in excess of a given threshold or confidence interval. Can you analyse and appreciate the existing VaR methodologies in terms of market risk evaluation?

How to maintain software at the clients site : A recent internal study revealed that this client's demand for your software is Q^d = 100 - 0.1P and that it would cost you $500 per unit to install and maintain software at this client's site. the profit that results from charging this client a si..

How much should the firm charge for this package : A monopoly is considering selling several units of a homogenous product as a single package. A typical consumer's demand for the product is Q^d = 50 - 0.25P, and the marginal cost of production is $120. Determine the optimal number of units to put ..

Was slavery necessary for the growth of the cotton industry : What was the relationship between cotton and the slave economy in the antebellum American South. was cotton expansion necessary for the continuation of slavery. Was slavery necessary for the growth of the cotton industry.

Do you think fed chairman was a good appointment : The economy begins in long-run equilibrium. Then one day, the president appoints a new chairman of the Federal Reserve. This new chairman is well-known for his view that inflation is not a major problem for an economy.

Evaluate a companys pricing and retail strategy : Evaluate a companys pricing and retail strategy. Include analysis of the current market situation and the competitive strategy. Make sure to choose a company that you are familiar with and one that you have not used for other modules in the course..

Why the wage contracts have short durations : Suppose the Federal Reserve announced that it would pursue contractionary monetary policy to reduce the inflation rate. Would the following conditions make the ensuing recession more or less severe.Wage contracts have short durations.

User Account

All Pages