The market demand for a monopoly firm is estimated to be:Qd = 100,000 - 500P + 2M + 500PRwhere Qd is quantity demanded, P is price, M is income, and PR is the price of a related good. The manager has forecasted the values of M and PR will be $50,000 and $20, respectively, in 2016. The average variable cost function is estimated to beAVC = 520 - 0.03Q + 0.000001Q2Total fixed cost in 2016 is expected to be $4 million. The profit-maximizing price for 2016 is
A. $100.
B. $260.
C. $520.
D. $80.
E. $560.
Answer: E
You might also like to view...
By itself, a supply shock, such as a hike in the price of oil, can
A) cause real GDP to permanently decrease year after year. B) not result in persisting inflation. C) be inflationary as long as there is no policy response. D) result in persisting inflation if aggregate supply persistently increases. E) result in a persisting wage-price spiral.
Refer to Table 22-3. Use the table above to calculate the annual growth rate in GDP. Also calculate the total percentage change in the growth from 2013 through 2016
Explain the difference between the average annual growth rate in real per capita GDP from 2013 through 2016 and the total percentage change in growth from 2013 and 2016.
An example of a public policy response to a monopoly is:
A. antitrust laws. B. public ownership. C. doing nothing. D. All of these are examples.
If a Pigovian tax is not large enough, the resulting market quantity:
A. will be equal to the efficient quantity. B. will be more than the efficient quantity. C. will be less than the efficient quantity. D. will be where the social marginal cost equals the social marginal benefit.