MYECON LAB W/PEARSON ETEXT MICROECON>IP
MYECON LAB W/PEARSON ETEXT MICROECON>IP
9th Edition
ISBN: 9780134153988
Author: PINDYCK
Publisher: PEARSON
Question
Book Icon
Chapter 11, Problem 15E

(a)

To determine

Optimal prices and profits when the goods are sold separately and as pure and mixed bundles.

(b)

To determine

Optimal pricing strategy for profit maximization with MC of $30.

Blurred answer
Students have asked these similar questions
Consider a simple Bertrand market in which N=3 firms compete by setting prices. As long as they can purchase for less than 20, 10 million consumers select to buy the good from the cheapest firm, and break indifferences at random with equal probabilities if more than one firm set the lowest price. a- The three firms have equal marginal costs c1 =c2 =c3 =5. Derive the demand and payoff function of each firm i as a function of the prices in the market. b- What is the set of non-dominated strategies (or prices) for each firm? c- Derive the Nash Equilibrium of this game. d- How do total consumer surplus, welfare, and profits in the market change relatively to a- above if firm 1 becomes more efficient, and specifically if c1 =2<c2=c3=5 How does total consumer surplus, welfare, and profits in the market change if relatively to d- above, while firm 1 becomes more efficient, firms 2 and 3 experience a cost-increase (e.g. inputs become harder to procure) so that c1 =2<c2 =c3 =7? f- In…
There are two types of consumers in Melbourne: students and non-students. The student population is 10, and each student’s demand of printing paper is Q=1−P, for P<1.The non-student population is 40, and each non-student’s demand of printing paper is Q=3−P, for P<3. Suppose OfficeMax is the only seller of printing paper in Melbourne. Assume zero production cost. Suppose OfficeMax cannot offer student discounts, and every customer has to pay the same price P. Derive the aggregate demand curve (for both students and non-students), and illustrate it in a diagram.
A monopolistic producer of two goods, 1 and 2, has a joint total cost function TC=10Q_(1)+Q_(1)Q_(2)+10Q_(2) where and denote the quantity of items of goods 1 and 2, respectively that are produced. If P1 and P2 denote the corresponding prices then the demand equations are P_(1)=50-Q_(1)+Q_(2) P_(2)=30+2Q_(1)-Q_(2) Using the Lagrange multiplier approach, find the maximum profit if the firm is contracted to produce a total of 15 goods of either type. Estimate the new optimal profit if the production quota rises by 1 unit.
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Micro Economics For Today
Economics
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Cengage,
Text book image
Economics For Today
Economics
ISBN:9781337613040
Author:Tucker
Publisher:Cengage Learning
Text book image
Survey Of Economics
Economics
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Cengage,
Text book image
Microeconomic Theory
Economics
ISBN:9781337517942
Author:NICHOLSON
Publisher:Cengage
Text book image
Survey of Economics (MindTap Course List)
Economics
ISBN:9781305260948
Author:Irvin B. Tucker
Publisher:Cengage Learning
Text book image
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning