xc-11-7-key

# xc-11-7-key - MR = 1000-8Q B At what quantity will MR = 0...

This preview shows page 1. Sign up to view the full content.

Waddayaknow Name ___key_____________ November 7, 2006 Row ________________________ If inverse demand is a straight line: Price = A - BQ Then the formula for MR always equals MR = A - 2BQ MR thus starts at the same point on the vertical axis and is twice as steep as demand. For the following inverse demand curve Price = 1000 – 4Q A) Give the formula for Marginal Revenue
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: MR = 1000-8Q B) At what quantity will MR = 0? 1000-8Q = 0 q = 125 C) Given your answer to B, over what range of quantity will demand be elastic? 0 to 125 D) If MC = 2Q, find the monopolist's profit-maximizing point. 1000-8Q = 2Q Q = 100 E) Calculate price at the profit-maximizing point (use the inverse demand curve). Price = 1000 – 4*100 = 600...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online