EBK STUDY GUIDE FOR MANKIW'S PRINCIPLES
7th Edition
ISBN: 9781337509848
Author: Mankiw
Publisher: VST
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Chapter 15, Problem 7PA
Subpart (a):
To determine
Monopoly pricing and price elasticity of demand .
Subpart (b):
To determine
Monopoly pricing and price elasticity of demand .
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
Consider the relationship between monopoly pricing and price elasticity of demand.a. Explain why a monopolist will never produce a quantity at which the demand curve isinelastic. (Hint: If demand is inelastic and the firm raises its price, what happens to totalrevenue and total costs?)b. Draw a diagram for a monopolist, precisely labeling the portion of the demand curve thatis inelastic. (Hint: The answer is related to the marginal- revenue curve.)c. On your diagram, show the quantity and price that maximize total revenue.
Sara is a single-price, profit-maximizing monopolist who sells her own patented perfume (shown in the graph below).
a. What is the equilibrium price and quantity under monopoly conditions?
b. If instead Sara had to operate like a competitive firm, what would be the equilibrium price and quantity?
c. What is the deadweight loss and total loss to consumer surplus when Sara operates as a monopoly?
d. How much surplus would Sara have if she could act as a perfectly price-discriminating monopolist?
Chapter 15 Solutions
EBK STUDY GUIDE FOR MANKIW'S PRINCIPLES
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. 11PA
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