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What price would the firm choose if it wishes to maximize profits? Use monopoly midpoint rule to explain relationship between your answers to parts (a) and (b).
Suppose that you are hired as a consultant to a firm producing a therapeutic drug protected by a patent that gives a firm. What price should the firm charge?
Find Gillette's profit-maximizing price and quantity of output for the Mexican market overall.
If the firm wants to maximize profit from the sale of large lattes, about what price should the firm charge?
Suppose a monopolist has the demand function Q = 1,000P-3 . What is the monopolist's optimal markup of price above marginal cost?
Derive an expression for the monopolist's optimal quantity and price in terms of a, b, c, and e.
Which monopolist will have a higher markup: the one with the flatter demand curve or the one with the steeper demand curve?
A monopolist serves a market in which the demand is P = 120 - 2Q. What is the maximum amount of profit the firm can earn?
The Bangkok Post cost $0.10 in 1970 and $0.15 in 2010. Why did worker's purchasing power in term of newspaper rise or fall?
Define the different types of ‘market failure'. Explain the rationale behind the possible introduction of a pollution tax.
What does this tell you about the magnitude of the marginal revenue product of labor relative to the wage that the firm is currently paying its workers?
How many nurses does National Hospital employ, and what wage will National pay its nurses? What is the deadweight loss arising from monopsony?
Find the profit-maximizing quantity and price per unit for the second block if Q1 = 20 and P1 = 80.
What is the firm's total revenue when it produces two units? What is the relationship between the price and the marginal revenue of the fourth unit?
Suppose the firm sets a uniform price to maximize profit. What is the largest value of F for which the firm could earn zero profit?
For what values of F can a profit-maximizing firm engaging in perfect first-degree price discrimination earn at least zero economic profit?
How much would the firm's profit increase compared with the uniform profit-maximizing price you found in (a)?
How much extra surplus does the producer capture when it can engage in first-degree price discrimination instead of charging a uniform price?
How might bundling increase a firm's profits? When is bundling not likely to increase profits?
How might screening help a firm price discriminate? Give an example of screening and explain how it works.
Will third-degree price discrimination necessarily improve its profit? Would the firm ever be worse off with price discrimination?
With first-degree price discrimination, why is the marginal revenue curve the same as the demand curve?
Why must a firm have at least some market power to price discriminate? Why must a firm prevent resale if it is to price discriminate successfully?
Suppose that the market for cigarettes in a particular town has. What should the excise tax be in order to raise the required amount of money?
How much would you expect the equilibrium price paid by consumers to change? How much would you expect the equilibrium price received by producers to change?