Consumer demand curve and price elasticity of demand

Reference no: EM1370024

A monopolist currently charges $50.00 per unit for the 100,000 units of product it produces and sells each month. An economic analysis has shown that, given the consumer demand curve and price elasticity of demand, Marginal Revenue would equal Marginal Cost when both are $37.50 per unit. The quantity where Marginal Cost is $37.50 per unit is 120,000 units per month. To maximize its profit this firm should:

a. (Increase/Decrease) output.
b. The new level of output should be: ____ units per month.
c. To sell this new number of units the firm will have to (raise/lower) its price.
d. The new price should be (greater than/less than) the Marginal Revenue.
e. The new price will have to be (more than/less than) the old price.

Reference no: EM1370024

Questions Cloud

Determining monopolist demand function : Derive a total revenue function and a marginal revenue function for the firm. Calculate the profit maximizing level of price and output for One and Only Inc.

Methodology to find the optimal activity levels : Appalachian Coal Mining believes that it can raise labor productivity and, therefore, net revenue by reducing air pollution in its mines. Its estimates that the marginal cost function for decreasing pollution

Write guide for the organization : Write a 2-3 page report recommending style manual and/or technical/legal writing guide for the organization to use and describe the reasons for your recommendations.

Determining profit in pre and post merger : The market for a standard-sized cardboard container comprises two firms: BooBox and Flimflax. As manager of BooBox you enjoy patented technology which permits your company to produce boxes faster and at lower cost than Flimflax.

Consumer demand curve and price elasticity of demand : A monopolist currently charges $50 a unit for the 100,000 units of product it produces and sells every month. An economic analysis has shown that,

Profits in monopoly-perfectly competitive environment : Assume marginal cost increases to 25 as a result of imposition of a tax. What takes place to monopoly and competitive price and output?

Verify local police department-s findings on firm-s case : Tension over case is running high in city. What do you require to ask police investigator for, and what procedures must you follow?

Explain what challenges or barriers may happen : Explain What challenges or barriers may happen and How will the best strategy be determined and What measures will you use to determine if the team is operating successfully

Determine the date in opening of letter : If /home/jenny/draft and /home/alex/letter are links to same file and following sequence of events occurs, what will be date in opening of letter? Alex gives command vim letter.

User Account

All Pages