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Unformatted text preview: PRACTICE QUESTIONS FOR THE FINAL EXAM VERY IMPORTANT : For full credit on the final exam, make sure that your answers show all your work . State the optimality conditions, label all your accurately drawn diagrams, explain how you came by your answer . I will take a few points off if all you have on paper is a few numbers and a diagram with no accompanying explanation – even if your answer is correct . I want you to demonstrate on paper that you know what you are doing. (1) Page 386, Chapter 11, Problem 18. (NOTE : There is a fixed cost here. MC = 5, but AC ≠ 5. ) Find the profit earned by the monopolist as well. (2) Page 420, Chapter 12, Problem 18. (3) Page 420, Chapter 12, Problem 20. (4) Suppose that two identical firms ( A and B ) produce widgets and that they are the only two firms in the market. They have constant marginal and average costs of $30. The market inverse demand equation is Q P = 150 , where B A q q Q + = . The marginal revenue equations are therefore: B A A q q MR...
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 Summer '05
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 Microeconomics, Game Theory, Supply And Demand, Michele, Toby, Willie

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