Quiz 4 Solution

# Quiz 4 Solution - Quiz 4 Solution Econ 2G03/2X03 Nov 15th...

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Quiz 4 Solution Econ 2G03/2X03 Nov 15 th 2000 Fred Aswani 1. Correct answer: (e). As shown below, when LAC is downward sloping, LMC is not necessarily downward sloping. 2. Profit is maximized at MC MR = . ) 34 , 85 ( ) , ( 85 17 102 2 34 102 2 102 1 2 102 2 102 ) 102 ( ) ( ) ( 34 3 102 3 102 2 102 2 16 2 2 2 = = - = - = - = - = = = - = - = = = ÷ = = = - = = + = y P y y y y y TR AR P y y dy y dy y MR y TR y y y y MC MR y MC y TC Correct answer: (a) 3. Demand: y p p y - = - = 10 10 , 2 = = y TC MC y y TR MR y y y y py TR 2 10 10 ) 10 ( 2 - = = - = - = = Equilibrium for monopolist: MC MR = ) 4 , 6 ( ) , ( 6 4 10 10 4 8 2 2 2 10 = = - = - = = = = - m m y p y p y y y Equilibrium for monopolist: MC p = Page 1 of 4 Demand Curve LMC LAC \$ Y

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) 8 , 2 ( ) , ( 2 8 10 10 8 2 10 2 10 = = - = - = = - = = = - = pc pc y p y p y MC y p 8 ) 4 )( 4 ( 2 1 ) 4 8 )( 2 6 ( 2 1 ) )( ( 2 1 = = - - = - - = m
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## This note was uploaded on 06/18/2011 for the course ECON 2X03 taught by Professor Jamesbruce during the Spring '10 term at McMaster University.

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Quiz 4 Solution - Quiz 4 Solution Econ 2G03/2X03 Nov 15th...

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