Principles of Microeconomics
8th Edition
ISBN: 9781337676670
Author: N. Gregory Mankiw
Publisher: Cengage Learning US
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Chapter 15, Problem 10PA
Subpart (a):
To determine
The profit maximization, dead weight loss and social welfare.
Subpart (b):
To determine
The profit maximization, dead weight loss and social welfare.
Subpart (c):
To determine
Dead weight loss.
Subpart (d):
To determine
The profit maximization, dead weight loss and social welfare.
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Based on market research, a film production company in Ectenian obtains the following information about the demand and production costs of its new DVD:Demand: P = 1,000 – 10QTotal Revenue: TR = 1,000Q – 10Q2Marginal Revenue: MR = 1,000 – 20QMarginal Cost: MC = 100 + 10Qwhere Q indicates the number of copies sold and P is the price in Ectenian dollars.d. Suppose, in addition to the costs above, the director of the film has to be paid. The company is considering four options:i. A flat fee of 2,000 Ectenian dollarsii. 50 percent of the profitsiii. 150 Ectenian dollars per unit soldiv. 50 percent of the revenueFor each option, calculate the profit-maximizing price and quantity. Which, if any, of these compensation schemes would alter the deadweight loss from monopoly? Explain
Maximum Revenue
Jesaki Electronics manufactures and sells a smartphones per week. The weekly price-demand and
cost equations are, respectively,
p= 536 - 0.40 x and C(x) = 19,932 + 23 x.
Suppose Jesaki Electronics wants to maximize weekly revenue. Compute the following quantities.
1. How many phones should be produced each week?
phones. Round to 2 decimal
places.
2. What price should Jesaki charge for the phones? $
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3. What is the maximum weekly revenue? $
per week. Round to the nearest cent.
Enter the result for 1.
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Based on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new
DVD:
Demand:
P= 1,200 - 10Q
Total Revenue:
TR = 1,2000 - 10Q
Marginal Revenue: MR 1,200 - 200
Marginal Cost:
MC = 300 + 100
where Q indicates the number of copies sold and Pis the price in Ectenian dollars.
Complete the following table by finding the price and quantity that maximize the company's profit and the price and quantity that maximize social
weifare.
Price
Quantity
Scenario
(Dollars)
(DVDs)
Maximizes the company's profit
Maximizes social weifare
The deadweight loss from the monopoly is S
Suppose, in addition to the foregoing costs, the director of the fim has to be paid. The company is considering four options:
Chapter 15 Solutions
Principles of Microeconomics
Ch. 15.1 - Prob. 1QQCh. 15.2 - Prob. 2QQCh. 15.3 - Prob. 3QQCh. 15.4 - Prob. 4QQCh. 15.5 - Prob. 5QQCh. 15 - Prob. 1CQQCh. 15 - Prob. 2CQQCh. 15 - Prob. 3CQQCh. 15 - Prob. 4CQQCh. 15 - Prob. 5CQQ
Ch. 15 - Prob. 6CQQCh. 15 - Prob. 1QRCh. 15 - Prob. 2QRCh. 15 - Prob. 3QRCh. 15 - Prob. 4QRCh. 15 - Prob. 5QRCh. 15 - Prob. 6QRCh. 15 - Prob. 7QRCh. 15 - Prob. 8QRCh. 15 - Prob. 1PACh. 15 - Prob. 2PACh. 15 - Prob. 3PACh. 15 - Prob. 4PACh. 15 - Prob. 5PACh. 15 - Prob. 6PACh. 15 - Prob. 7PACh. 15 - Prob. 8PACh. 15 - Prob. 9PACh. 15 - Prob. 10PACh. 15 - Prob. 11PACh. 15 - Prob. 12PA
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