What do you understand by discriminatory monopoly

Assignment Help Macroeconomics

Reference no: EM133203826 , Length: 5 Pages

Assignment:

1. Explain the effects of low price-guarantee on the price.

2. What do you understand by discriminatory monopoly? Bring out the conditions that enables the monopoly firm to charge different prices for its product in different markets.

3. The figure below shows the demand and cost curves for a monopolist. Assume there are no fixed costs in the market and an unlimited number of units of the product can be produced at a marginal cost of $10 per unit. As a result average total cost and marginal cost are the same.

1355_Cost curves for a monopolist.jpg

Part 2

1) Find the output level and the price charged to consumers, when the monopolist is maximizing its profit.

2) Find the monopoly's total economic profit when it is maximizing its profit.

3) What would be the market price and the market quantity, if the industry in the figure is perfectly competitive (Assuming a constant cost industry)?

4) Find the optimal quantity for producing:

Quantity	Price	Total Revenue	Marginal Revenue	Marginal Cost
0	40	0	-	-
1	35	35	35	5
2	30	60	25	10
3	25	75	15	15
4	20	80	5	20
5	15	75	-5	25

Why did you choose this quantity?

Reference no: EM133203826

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