User Account

All Pages

Claudia, economics, Microeconomics

Assignment Help:
Directions: You should legibly handwrite or type the answers to the following questions on a separate sheet of paper. These must be submitted in class (not via email unless you have permission).

1. (p. 325, #4) a. Draw the demand, marginal-revenue, average-total-cost, and marginal-cost curves for a monopolist. Show the profit-maximizing price and the amount of profit.
b. On this graph, show the deadweight loss.


2. (p. 325, #1 (b) – (f)) A publisher faces the following demand schedule for the next novel from one of its popular authors:
Price Quantity demanded
$100 0 novels
90 100,000
80 200,000
70 300,000
60 400,000
50 500,000
40 600,000
30 700,000
20 800,000
10 900,000
0 1,000,000

The author is paid $2 million to write the book, and the marginal cost of publishing the book is a constant $10 per book.
b. Compute marginal revenue. How does marginal revenue compare to price? Explain.
c. Graph the marginal-revenue, marginal-cost and demand curves. At what quantity do the marginal-revenue and marginal-cost curves cross? What does this signify?
d. In your graph, shade in the deadweight loss. Explain in words what this means.
e. If the author were paid $3 million instead of $2 million for the book, how would this affect the publisher’s decision regarding what price to charge? Explain.
f. Suppose that the publisher was not profit-maximizing but was concerned with maximizing economic efficiency. What price would it charge for the book? How much profit would it make at this price?

3. (a) Give two examples of price discrimination. Identify what type of price discrimination each example is (i.e. perfect, 2nd degree or 3rd degree).
(b) Name and explain the three conditions that must hold in order for a firm to be able to price discriminate.



4. (a variation of #5, p. 326)
Larry and Moe run the only saloon in town. Larry wants to sell as many drinks as possible without losing money. Moe wants to make the largest possible profits. Using the graph below (you can re-draw it on your own paper or print this out), show the price and quantity of favored by each person.
Extra credit: Curly wants to maximize revenue. Show his favored price and quantity.













5. (variation of #12, p. 328) Based on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD:
Price Quantity Total cost
1000 0 1000
950 5 1125
900 10 1500
850 15 2250
800 20 3500
750 25 5250
700 30 7500
650 35 10250
600 40 13500
550 45 17250
500 50 21500
a. Find the price and quantity that maximizes the company’s profit.
b. Compute and graph demand, marginal revenue and marginal cost.
c. Illustrate the price and quantity that would maximize social welfare and the deadweight loss.

Related Discussions:- Claudia, economics

Supply/demand/cost curves, given short run total cost curve :10q^2+4q=100 a...

given short run total cost curve :10q^2+4q=100 and short run marginal cost MC=20q+4 and market demand Q=100-p what''s the equation of the short run supply curve?

Summary of educational planning and economic growth, Summary of Educational...

Summary of Educational Planning and Economic Growth An economy with scarce resources and enormous needs and aspirations requires planning. This is true of the education sector

Asian development bank, ASIAN DEVELOPMENT BANK; In addition to the Wor...

ASIAN DEVELOPMENT BANK; In addition to the World Bank family, there are three other international lending agencies operating only in specific geographical area, but run on lin

Law of variable proportions, where does stage 1 end?

where does stage 1 end?

Incomes rise, Normal 0 false false false EN-IN X-NON...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

The demand for big macs, illustrate and explain the changing demand gor big...

illustrate and explain the changing demand gor big Mac using the indifference curves and budget line

Demand-pull inflation, The average price level has increased at a relativel...

The average price level has increased at a relatively rapid rate since 2008 even though the deep recession that UK experienced in 2008/09. The growth in the price level has been dr

Shares and slavery, Shares: Financial assets that represent ownership of a ...

Shares: Financial assets that represent ownership of a small proportion of total equity (or net wealth) of a corporation. Shares can be sold and bought on a stock market. Slaver

Principle agent problem, Principle Agent Problem [Dealing with hidden actio...

Principle Agent Problem [Dealing with hidden action] Assume that the employer (principle) wants its employee (agent) to work hard [You can safely assume that this maximizes th

Explain the duality between direct and indirect utility, Explain about the ...

Explain about the duality between direct and indirect utility. Duality between Direct and Indirect Utility: While seen how one can recover an indirect utility function by ob

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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