Essentials Of Economics, Loose-leaf Version
8th Edition
ISBN: 9781337096898
Author: N. Gregory Mankiw
Publisher: South-Western College Pub
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Chapter 14, Problem 5PA
Subpart (a):
To determine
Subpart (b):
To determine
Monopoly pricing and price
Subpart (c):
To determine
Maximize total revenue.
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Hi! I got stuck with my microeconomics homework. Can you please help? Here's the problem:
A monopolist knows that in order to expand the quantity of output it produces from 8 to 9 units it must lower the price of its output from $2 to $1. Calculate the quantity effect and the price effect. Use these results to calculate the monopolist’s marginal revenue of producing the 9th unit. The marginal cost of producing the 9th unit is positive. Is it a good idea for the monopolist to produce the 9th unit?
It is from Microeconomics: Canadian Edition
by Paul Krugman; Robin Wells; Iris Au; Jack Parkinson
The accompanying graph depicts the marginal revenue (MR),
demand (D), and marginal cost (MC) curves for a monopoly.
a. Place point P₁ at the profit maximizing price and quantity
assuming that the monopolist can only charge a single price.
b. What are the profits of the firm if it charges a single price?
$
Suppose the monopolist able to successfully price
discriminate between two groups by charging one group $60
and charging $35 to the other group.
c. What are the firm's profits if it charges the two prices as
mentioned above?
Price and Costs($)
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MR
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Quantity
Chapter 14 Solutions
Essentials Of Economics, Loose-leaf Version
Ch. 14.1 - Prob. 1QQCh. 14.2 - Prob. 2QQCh. 14.3 - Prob. 3QQCh. 14.4 - Prob. 4QQCh. 14.5 - Prob. 5QQCh. 14 - Prob. 1CQQCh. 14 - Prob. 2CQQCh. 14 - Prob. 3CQQCh. 14 - Prob. 4CQQCh. 14 - Prob. 5CQQ
Ch. 14 - Prob. 6CQQCh. 14 - Prob. 1QRCh. 14 - Prob. 2QRCh. 14 - Prob. 3QRCh. 14 - Prob. 4QRCh. 14 - Prob. 5QRCh. 14 - Prob. 6QRCh. 14 - Prob. 7QRCh. 14 - Prob. 8QRCh. 14 - Prob. 1PACh. 14 - Prob. 2PACh. 14 - Prob. 3PACh. 14 - Prob. 4PACh. 14 - Prob. 5PACh. 14 - Prob. 6PACh. 14 - Prob. 7PACh. 14 - Prob. 8PACh. 14 - Prob. 9PACh. 14 - Prob. 10PACh. 14 - Prob. 11PACh. 14 - Prob. 12PA
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