Problem Set 6

Problem Set 6 - Problem set 6 Due: Wednesday April 15th...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Problem set 6 Due: Wednesday April 15th Please write as neatly as possible and clearly indicate each final answer by circling or double underlining (this is not necessary for graphs). Chapter 11 Questions: 1. A monopolist operates with the following data on cost and demand. It has a total fixed cost of 1400 and a total variable cost of g G , where Q is the number of units of output it produced. The firm’s demand curve is ± = 120 − 2g The size of its sunk costs is 600. The firm expects the condition of demand and cost to continue in the foreseeable future. a. What is the firm’s profit if it operates and it maximized profit? b. Should the firm continue to operate in the short-run, or should it shut down? Explain how you reached this decision. 2. Assume that a monopolist sells a product with a total cost function ²³ = 1200 + ´ µ G . The market demand curve is given by the equation ± = 300 − g . a.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

Problem Set 6 - Problem set 6 Due: Wednesday April 15th...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online