No. 1
Assuming that:
Total cost TC = 500 – 4Q + 1.5Q2
Demand P = 96 – 0.5Q
What is the optimum output to maximize profit? What is the profit level?
Hint: TR = P*Q!
No. 2
Assuming that:
Total cost TC = 500 – 4Q + 1.5Q2
Demand P = 96 – 0.5Q
What is the optimum output to maximize profit? What is the profit level?
Hint: TR = P*Q!
•For a monopoly market, compute P if ED = -1.2; -2.0; -3,0, -5 and -10!
•What is your conclusion!
No. 3
Give a real example of a company or companies having a market power and briefly explain the firm’s elasticity of demand
(hint: based on (i) market demand; (ii) the number of firms; and (iii) the interaction among firms)
No. 4
Using a diagram, briefly explain how a monopsonist determines the price and quantity to maximize its benefit/satisfaction!
Expert Answer