Microeconomic Theory
12th Edition
ISBN: 9781337517942
Author: NICHOLSON
Publisher: Cengage
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Chapter 17, Problem 17.10P
Wonopoly and natural resource prices
Suppose that a firm is the sole owner of a stock of a natural resource.
a. How should the analysis of the maximization of the discounted profits from selling this resource (Equation 17.63 be modified to take this fact into account?
b. Suppose that the demand for the resource in question had a constant elasticity form
c. How would the answer to Problem 17.7 be changed if the entire crude oil supply were owned by a single firm?
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The Dolan Corporation, a maker of small engines, determines that in 2012 the
demand curve for its product is P = 2,000 - 50Q
where P is the price (in dollars) of an engine and Q is the number of engines sold per month.
a. To sell 20 engines per month, what price would Dolan have to charge?
b. If managers set a price of $500, how many engines will Dolan sell per month?
c. What is the price elasticity of demand if price equals $500?
d. At what price, if any, will the demand for Dolan’s engines be of unitary
elasticity?
Only typed answer and don't use chat gpt
If demand function is given as the following:
Qz = 230 -2.75 Pz + 0.5 I + 1.2 Pm + 0.6A
Where Qz is quantity of Good z sold, Pz is price of Good z per unit, I is per capita income, Pm is price of competitor and A is the amount of advertising spent.
Current values: Pz= RM 55 I= RM 9000 Pm= RM 50 A =RM 12,000
a) Should the firm consider giving a price discount in order to increase total revenue?
Example 2:Management has at its disposal the following information:Demand (price) function: P =32 –QTotal cost function: C(Q) = 200 +2Q.Using the above functions, determine the following:a. Profit maximizing output (quantity)b. Profit-maximizing pricec. Maximum profit valued. Revenue-maximizing output. (quantity)
Chapter 17 Solutions
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