Identify the profit-maximizing level of price, output, total revenue, profit.
1) Bill faces fixed costs of $8 and total variable costs as follows:
|
Q
|
0
|
1
|
2
|
3
|
4
|
5
|
|
VC
|
0
|
8
|
12
|
24
|
40
|
60
|
2) If Bill is a monopolist with the subsequent demand:
|
P
|
23
|
22
|
21
|
20
|
19
|
18
|
|
Q
|
0
|
1
|
2
|
3
|
4
|
5
|
3) Identify the profit-maximizing level of
a) output;
b) price;
c) total revenue;
d) total cost; and
e) profit.
4) Owners of local newspapers have resisted the introduction of electronic news services (via cable television or via telephone data transmission). Why would newspaper owners oppose electronic news? To whom do you suppose they turn for protection?
5) Why would a monopolistic competitor advertise?
6) Consider a company which negotiates contracts with buyers once every two years and which sells sophisticated machinery. Explain why it would be difficult for this company to collude.
7) Why can't a regulator use marginal-cost pricing for a natural monopolist?