Problem_Set_8

Problem_Set_8 - C Q = Q 2 what is the optimal level of...

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ECON W3211.002 Intermediate Microeconomics Problem Set 8 Due Monday, November 22, 2010 1. Answer the following questions: (a) The monopolist faces a demand curve given by Q = 100 - 2 p . The firm’s cost function is C ( Q ) = 2 Q . What is the optimal level of output and price? (b) How does your answer change if Q = 10 p - 3 (c) If Q = 100 /p and
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Unformatted text preview: C ( Q ) = Q 2 , what is the optimal level of output of the monopolist? 2. Perloff, Chapter 11: 27 1 , 37, 41 3. Perloff, Chapter 13: 26, 28 2 , 30, 35 1 There are a couple of typos in the text book; Set the production Q = L . 5 K . 5 and MP L = 1 2 K . 5 /L . 5 . 2 Assume m < 1 . 1...
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