C8_ReviewQuestions_2010-04-15

C8_ReviewQuestions_2010-04-15 - Review Questions for...

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Review Questions for Chapter 8 – Pricing ECON 303 Managerial Economics, Spring 2010 Edward L. Millner , Department of Economics Copyright Millner 2009-10 R8.1 Suppose that the firm is producing 100 units of output, marginal cost equals $25, marginal revenue = $20, and that both marginal cost and marginal revenue are constant over the relevant range. Is the firm maximizing profit? If not, how could it increase profit? R8.2 Suppose that the price elasticity of demand is -3, price is $21, and marginal cost is $10. Is the firm maximizing profit? If not, how could it increase profit? R8.3 Suppose that the demand curve facing a firm is given by Q d x = 100 – 0.5 P x . What is the (point) marginal revenue when P x = $40? Print this sheet and record your answers on the printout, and bring the printout with your answers to class. Show your work!
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R8.4 Suppose that the demand and supply curves in a perfectly competitive industry are Q d = 900 – 4 P and Q s = -300 + 2 P, respectively, and that the total cost for
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This note was uploaded on 11/04/2010 for the course ECON 303 taught by Professor Shrestha during the Fall '08 term at VCU.

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C8_ReviewQuestions_2010-04-15 - Review Questions for...

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