Equivalent to the inverse demand curve

Assignment Help Business Economics

Reference no: EM131088470

Consider a product that has a cost function: c(y) = 20y+25. Demand for this product is represented by the demand curve: y=1/b*(A-p).

Note that this is equivalent to the inverse demand curve: p = A-by

Q: Use the envelope theorem to determine wheter the monopolists profits will increase or decrease with b.

Reference no: EM131088470

Questions Cloud

No firm is completely sheltered from rivals : "No firm is completely sheltered from rivals; all firms compete for the consumer dollars. If that is so, then pure monopoly does not exist." Do you agree? Explain. How might you use Chapter 6's concept of cross elasticity of demand to judge whether m..

Define the terms diverticulosis and diverticulitis : Describe some of the signs or symptoms a person with a hiatal hernia might have. What is a pulmonary embolus? What was the etiology (cause) of the pulmonary embolus for this patient? What is gastritis?

Recalculate the replacement rates including medicare : A middle-income worker will retire in January 2017. In the year prior to retirement, her gross monthly earnings are $4,500. Her Social Security pension benefit will be $1,500 per month. Prior to retirement, she was subject to total taxes on her labor..

Quantitative methods in health care management : Any existing numbers in green cells in the automated tables are for examples, and show where you should enter the data. You must delete or overwrite these numbers to perform the calculations.

Equivalent to the inverse demand curve : Consider a product that has a cost function: c(y) = 20y+25. Demand for this product is represented by the demand curve: y=1/b*(A-p). Note that this is equivalent to the inverse demand curve: p = A-by. Use the envelope theorem to determine wheter the ..

Assume the market for fertilizer is perfectly competitive : Assume the market for fertilizer is perfectly competitive. Firms in the market are producing output, but they are currently making economic losses. How does the price of fertilizer compare to the average total cost, the average variable cost, and the..

Discuss the significance of the laboratory values : Discuss the cause and effect relationship between Candy's level of growth and development and her diagnosis. What other data would be helpful for the nurse practitioner to have?

Firm operating in perfectly competitive market : Bob’s lawn-mowing service is a profit-maximizing firm operating in a perfectly competitive market. Bob mows lawns for $27 each. His total cost each day is $280, or which $30 is a fixed cost. He mows 10 lawns a day. What are Bob’s decision rules about..

Application-organizational analysis paper : Throughout this course, you have examined many different methods and strategies for improving performance, increasing throughput and profit, and designing more successful organizations. In this Application Assignment, you will synthesize concepts..

User Account

All Pages