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E303lect39F09 - December 4 2009 HW 13 Return HW 14 Due...

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December 4, 2009 HW 13 Return HW 14 Due . Final : Wednesday Dec 9, 8:30-11:30 a.m. Bring a pencil, and a 4 function calculator Lecture 39 REVIEW___________________________________________________: Chapter 8. The Firm in Competition. B. Monopoly 1. The difference between monopoly and competitive markets. 2. Reasons for Monopoly 3. Characterizing the problem for the Monopolist 4. The Social Cost of Monopoly 5. An analytical example 6. Optimal Pricing with limited Information PREVIEW_____________________________________________________ 5. An analytical example (continued) 6. Optimal Pricing with limited information (continued) REVIEW FOR EXAM Lecture______________________________________________________________. B . Monopoly. 5. An analytical example. TC = 400 + 10Q+ Q 2 P = 170- Q MR = 170-2Q MC= 10+2Q Thus, 4Q = 160 Q = 40 and P= 130 Consider now where the competitive firm might produce MC = ATC 10+2Q = 400/Q + 10 + Q Q 2 = 400 Q = 20 P = 50 Observation: An individual competitor produces less than a monopolist. However, the competitive market as a whole would produce a higher quantity.
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