PROBLEM SET 8

PROBLEM SET 8 - PROBLEM SET 8 Monopoly Department of...

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PROBLEM SET 8 Monopoly Department of Economics Professor William J. Stull Temple University Economics 1902 A. Sleds Rosebud, Inc. is the only seller of children's sleds in a certain market. The daily demand schedule for this product is given in the first two columns of Figure A. 1. Compute Rosebud's total revenue (TR) schedule by filling in the missing numbers in column 3 (labeled >). 2. Compute Rosebud's marginal revenue (MR) schedule by filling in the missing numbers in column 4 (labeled >). 3. Give a one sentence economic interpretation of the fifth number in column 3. ____________________________________________________________________ ____________________________________________________________________ 4. Give a one sentence economic interpretation of the third number in column 4. ____________________________________________________________________ _ ____________________________________________________________________ _ 5. Give a one sentence economic interpretation of the eighth number in column 4. ____________________________________________________________________ _ ____________________________________________________________________ _ 6. Plot and label Rosebud's demand and MR schedules in Figure B. Put the zero point on the vertical axis about two-thirds of the from the top of the grid (not at the bottom). Locate each MR value at the midpoint between the two relevant quantities. 7. Is price greater than, equal to, or less than MR when Rosebud produces positive
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output? __________ _
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8. Give a one sentence economic explanation for your previous answer. ____________ ____________________________________________________________________ _ ____________________________________________________________________ _ ____________________________________________________________________ _ 9. If Rosebud were a perfectly competitive firm, would price be greater than, equal to, or less than MR? ___________ _ 10.
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This note was uploaded on 04/28/2011 for the course ECON 1102 taught by Professor Tomczyk during the Spring '09 term at Temple.

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PROBLEM SET 8 - PROBLEM SET 8 Monopoly Department of...

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