PS 3 Econ 1 F07 - DARTMOUTH COLLEGE ECONOMICS 1 PRICE...

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D ARTMOUTH C OLLEGE P ROFESSOR J ESSE G IUMMO E CONOMICS 1: P RICE S YSTEM P ROBLEM S ET #3: D UE D ECEMBER 4 TH Question #1 : Given below is the demand schedule faced by a monopolist and the cost of production for a monopolist. Price Quantity Demanded Quantity Produced Production Cost 2000 0 0 0 1500 1400 1 1 1600 1250 2 2 1750 1100 3 3 1950 900 4 4 2200 750 5 5 2500 500 6 6 2850 200 7 7 3250 a) If the firm is a perfect price discriminating monopolist, how much does the firm produce, what is the firm’s revenue at the optimal level of production and what are the firm’s profits? b) If the firm is a single price monopolist, how much does the firm produce, what is the firm’s revenue at the optimal level of production and what are the firm’s profits?
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D ARTMOUTH C OLLEGE P ROFESSOR J ESSE G IUMMO E CONOMICS 1: P RICE S YSTEM Question #2 : The diagram below describes a sequential game in which a Firm A first chooses whether to increase, decrease, or not change advertising expenditures and then Firm B chooses whether to increase, decrease, or not change advertising expenditures. The first
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