Find the average cost pricing

Assignment Help Microeconomics
Reference no: EM13877301

Instead of pursuing profit maximization through marginal cost pricing, the reg- ulated natural monopolists are required to follow the average cost pricing. In the average cost pricing, a natural monopolist firm sets its price at the level where the demand curve intersects the average cost ATC curve. This policy, compared to marginal cost pricing, leads to production of a larger volume of output at a relatively lower price.

What is the level of output and price if a natural monopolist with the cost function TC = 0.3Q3- 8Q2+ 120Q and market demand function

P = 100 - Q follows the average cost pricing? (From 2 possible solutions choose the larger one.) Compare this solution to the profit maximizing solution.

Reference no: EM13877301

Questions Cloud

Stress-strain behavior for a steel alloy : Figure shows the tensile engineering stress-strain behavior for a steel alloy. (a) What is the modulus of elasticity?
What is the firm''s total wage bill : A firm is competitive in both product and resource market. The firm's short run production function is given by Q = 0.5L1/2 where L is the labor input. Assume the wage rate is $10 and the firm's fixed cost is 100. If the price of the good in the m..
What is the firm''s total wage bill : A firm is competitive in both product and resource market. The firm's short run production function is given by Q = 0.5L1/2 where L is the labor input. Assume the wage rate is $10 and the firm's fixed cost is 100. If the price of the good in the m..
The limit on the amount of wage income : If the government raised the limit on the amount of wage income that is subject to the F.I.C.A. tax, this would: A. Move the Lorenz curve further from the line of income equality  B. Have no effect on the Lorenz curve
Find the average cost pricing : What is the level of output and price if a natural monopolist with the cost function TC = 0.3Q3- 8Q2+ 120Q and market demand function P = 100 - Q follows the average cost pricing? (From 2 possible solutions choose the larger one.) Compare this so..
Strategies for successful health care marketing : Describe three different strategies for successful health care marketing and public relations.  Which is your personal favorite?  Why?
Perpetual preferred stock : 1) Johnson Corporation JUST PAID a dividend of $4.63.  The expected growth rate on dividends is 8 percent.  What is the current price of this stock if the required rate of return is 10 percent?
What is taylor rule : What is Taylor rule ?  please write very short paragraph.
Diffract meter and monochromatic x-radiation : Figure shows an x-ray diffraction pattern for a-iron taken using a diffract meter and monochromatic x-radiation having a wavelength of 0.1542 nm; each diffraction peak on the pattern has been indexed.

Reviews

Write a Review

Microeconomics Questions & Answers

  Question 1complete the table below for a feed price of 380

question 1.complete the table below for a feed price of 380 per tonne and a weaner price of 1.10 per kilogram. indicate

  What is the expected value for the annual savings

Annual savings due to energy efficiency thermo well have a most likely value of $30,000. The most optimistic value is $40,000 with a probability of 0.2 and a most pessimistic value of $20,000 at 0.3. The First Cost is $150,000, the interest rate 10%,..

  Discover the new equilibrium price and quantity

Given the below supply and demand equations for computers, The company decides to increase its marketing expenses to boost its sales and the new supply equation is P = 90 + 3Q and the new demand curve is P = 280 – 2Q. Discover the new equilibrium pri..

  Create 95 confidence interval for weekly average

based on a survey of 1000 adults by greenfield online and resported in a may 2009 usa today snapshot adults 24 years of

  Fiscal and monetary policy and the negative impact policy

Fiscal and monetary policy and the negative impact policy can have on the equilibrium of prices. Then, identify ways that a free market society can avoid the negative impact and maintain both production and price.

  Suppose that an oligopolistically competitive restaurant is

suppose that an oligopolistically competitive restaurant is currently serving 230 meals per day the output where mrmc.

  What do the behavior genetics research on family

What do the behavior genetics research on family influences and the evolutionary explanation of sex differences imply about the amount of influence parental behavior has on how masculine or feminine their sons and daughters become?

  What is the central limit theorem? how is it used

What is the Central Limit Theorem? How is it Used? Why is it Important?What is the Standard Error and How Can You Reduce It?

  Explain the basic concepts of simple systems recognize 3

discuss the basic concepts of simple systems.identify 3 examples of simple systems. identify 3 examples of simple

  Supply and demand curves

During the 4th-quarter of 1993, real GDP in US increase at an yearly rate of over 7 %. During 1994, the economy continued to expand with modest inflation

  Large country case

The following two equations represent the demand and supply schedules of motorbikes for Country A. Suppose country A is large enough to affect the world price of motorbike and therefore it faces an upward-sloping supply curve from the rest of world (..

  Determining value of firm

A company has a EBIT to be $100,000 every year forever. The company can borrow at 5%, has no debt and cost of equity of 15%. If the tax rate is 25 %, find out the value of the firm?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd