Problem 1: How does the demand curve faced by a purely monopolistic seller differ from that confronting a purely competitive firm? Why does it differ? Of what significance is the difference? Why is the pure monopolist's demand curve typically not perfectly elastic?
Problem 2: Suppose a pure monopolist is faced with the demand schedule that follows and the same cost data as the competitive producer discussed in question #3 (above).
Problem 3: Calculate the missing total-revenue and marginal-revenue amounts, and determine the profit-maximizing price and profit-earning output for his monopolist. What is the monopolist's profit?
Price ($) Quantity demanded Total Revenue ($) Marginal Revenue ($)
115 0
100 1
83 2
71 3
63 4
55 5
48 6
42 7
37 8
33 9
29 10
Problem 4: U.S. Pharmaceutical companies charge different prices for prescription drugs to buyers in different nations, depending of the elasticity of demand and government-imposed price ceilings. Explain why these companies, for profit reason, oppose laws allowing reimportation of their drugs back into the United States.