What is the profit-maximizing output of the monopolist

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Reference no: EM13886568

What is the profit-maximizing output of the monopolist shown below?

What price do they set? _______________________

What is the monopolist’s markup over the competitive price? ________________

Why will this price not fall?

Levi’s has an advertising slogan: “Quality never goes out of style.” Consumers can buy other kinds of jeans, including off-brands. The manufacturers of off-brand, or generic, jeans do not advertise. Assume that the average total cost of producing Levi’s and generic jeans is the same.

Create a graph showing the price (labeled as P1) that Levi’s changes. Also, identify the markup.

How does Levi’s advertising affect their profits?

Do Levi’s or the generic producers have a stronger incentive to maintain quality control? Why?

Reference no: EM13886568

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