# pm6 - the total and marginal approaches in the space below....

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

Additional Problem #6 : Pure Monopoly and Price Discriminating Monopoly Answer each question in the spaces provided. Show all work utilized to reach your answers in the work spaces provided. Given the following output (Q), price = average revenue (P=AR), and total cost (TC) data facing a firm, complete the questions that follow. Q P TC 0 \$16 \$15 1 14 20 2 12 24 3 10 27 4 8 29 5 6 32 6 4 36 7 2 41 a) Is the market structure here perfect or imperfect competition? . Explain your reasoning for this answer below. Is the firm operating in the short run or long run? . Give two reasons for this conclusion. b) What is the equilibrium output for this firm? . What is the equilibrium price for this firm? . Confirm your answer with a brief explanation using both the total and marginal approaches in the space below. c) Graphically show the equilibrium solution you found in part (b) for both

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

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: the total and marginal approaches in the space below. Label all axes and relationships. d) Now, assume that this firm engages in perfect price discrimination. Complete the table below by computing total revenue and marginal revenue for the firm. Q P TC 0 \$16 \$15 1 14 20 2 12 24 3 10 27 4 8 29 5 6 32 6 4 36 7 2 41 e) Describe briefly the marginal revenue that the firm (acting as a perfect price discriminator) obtains from the sale of each additional unit? . f) At the profit maximizing level of output, how many units will the perfectly price discriminating firm sell? . What are the total economic profits for this firm at that output level? . g) Compare the economic effects of price discrimination to no price discrimination for the firm in terms of profits, price, and output graphically in the space below....
View Full Document

## This note was uploaded on 10/26/2009 for the course ECON 180-004-20 taught by Professor Bresnock during the Fall '09 term at UCLA.

### Page1 / 2

pm6 - the total and marginal approaches in the space below....

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

View Full Document
Ask a homework question - tutors are online