A monopolist has the demand and marginal cost schedules given in the above table. If the monopoly can perfectly price discriminate, what is the profit-maximizing level of output and price?
What will be an ideal response?
As a perfectly price discriminating monopoly, the profit-maximizing level of output is 4 units and the price ranges from $22 to $16 for each unit.
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A) increase. B) decrease. C) stay the same. D) None of the above is correct.
If a product is a normal good, then its income elasticity of demand is
A) zero. B) positive. C) negative. D) indeterminate. E) greater than 1.
The four-firm concentration ratio (C4) of a market can be used to help determine whether firms may have market power.
a. true b. false
All of the following are assumptions of the classical model EXCEPT
A. pure competition. B. self-interest of economic actors. C. inflexible wages. D. absence of money illusion.