Ask Question, Ask an Expert


Ask Microeconomics Expert

1. a) Draw demand, marginal-revenue, average-total-cost, and marginal-cost curves for a monopolist. Demonstrate profit-maximizing price and amount of profit.

b) On this graph, demonstrate the deadweight loss.

2. A publisher faces the following demand schedule for next novel from one of its popular authors:

Price    Quantity demanded
$100       0 novels
90           100,000
80           200,000
70           300,000
60           400,000
50           500,000
40           600,000
30           700,000
20           800,000
10           900,000
0           1,000,000

The author is paid $2 million to prepare the book, and the marginal cost of publishing the book is a constant $10 per book.

b. Compute marginal revenue. How does marginal revenue compare to price? Describe.

c. Graph the marginal-revenue, marginal-cost and demand curves. At what quantity do the marginal-revenue and marginal-cost curves cross? What does this signify?

d. In your graph, shade in the deadweight loss. Describe in words what this means.

e. If the author were paid $3 million instead of $2 million for the book, how will this affect the publisher’s decision regarding what price to charge? Describe.

f. Assume that the publisher was not profit-maximizing but was concerned with maximizing economic efficiency. What price will it charge for the book? How much profit will it make at this price?

3.a) Give two exs of price discrimination. Identify what type of price discrimination each ex is (i.e. perfect, 2nd degree or 3rd degree).

b) Name and describe the three conditions that must hold in order for a firm to be able to price discriminate.


Larry and Moe run the only saloon in town. Larry wants to sell as many drinks as possible without losing money. Moe wants to make the largest possible profits. Using the graph below (you can re-draw it on your own paper or print this out), show the price and quantity of favored by each person.

Extra credit: Curly wants to maximize revenue. Show his favored price and quantity.

5. Based on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD:

Price    Quantity    Total cost
1000       0           1000
950        5            1125
900       10           1500
850       15           2250
800       20           3500
750       25           5250
700       30           7500
650       35         10250
600       40         13500
550       45         17250
500       50         21500

a. Determine the price and quantity which maximizes the company’s profit.

b. Compute and graph demand, marginal revenue and marginal cost.

c. Illustrate the price and quantity that would maximize social welfare and the deadweight loss.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91794

Have any Question? 

Related Questions in Microeconomics

Microeconomics assignmentdirections unless otherwise stated

Microeconomics ASSIGNMENT Directions: Unless otherwise stated, answer in complete sentences, and be sure to use correct English, spelling and grammar. Sources must be cited in APA format. Your response should be four (4) ...

Problem 1 given the following total revenue tr and total

Problem 1: Given the following total revenue (TR) and total cost (TC) functions, find the quantity of output (Q) that would maximize profit (π). Note that profit function is: π = TR - TC. TR = 1400Q - 7.5Q2 TC = Q3 - 6Q2 ...

Read the case target from expect more to pay less on pages

Read the case "Target: From 'Expect More' to 'Pay Less'" on pages 103 to 105 of the textbook and prepare answers to the questions below. Question 1 Identify four actors in the microenvironment that haveaffected Target's ...

Cost-benefit analysisi measuring benefits from projects

Cost-Benefit Analysis I. Measuring Benefits From Projects That Reduce Private Good Costs Of Production (No distortions.)The inverse demand function for a good is given by: P = 30 -Q/3. Assume that the initial supply curv ...

Question -for production of dodecylbenzene sulfonates main

Question - For production of Dodecylbenzene sulfonates (main raw material for production of detergent), the detergent plant needs 2000 metric ton per day of hydrocarbons (mixture is acceptable) with boiling point between ...

Economics money bankingintroductioneconomics money and

Economics Money Banking Introduction Economics Money and Banking focuses on the traditional model of money and banking in the American banking system, a mixed capitalist economy. The course explains the functions of mone ...

Discuss the security issues in addition to simple customs

Discuss the security issues (in addition to simple customs requirements) that your company must consider when transporting customers' goods across international borders. Do the markets your company usually serves make th ...

Q1 the demand and supply curves for beer aredemand qd 50 -

Q1. The demand and supply curves for beer are Demand: Q d = 50 - 2P d Supply: Q s   = 2P s where Q D is the quantity of beer demanded per year (in millions of cases), Q S is the quantity of beer supplied (in millions of ...

Assignmentthe best time to plan for a crisis is before it

Assignment The best time to plan for a crisis is before it occurs, certainly not when you're in the midst of one. Basel III has a new framework for managing bank liquidity.The liquidity coverage ratio (LCR) is for a shor ...

Assignment1perform an industry analysis for each of ibms

Assignment 1. Perform an industry analysis for each of IBM's top market segments: services, software, and hardware. Are these attractive industries? Why or why not? 2. Looking at IBM's RCCs, can IBM gain and sustain a co ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate