ajaz_eco_204_2012_2013_chapter_16_Market_Power

If neither case b or c have occur which means that as

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Unformatted text preview: P: ⏟ The RMP becomes: () [, , ⏟ ⏟ Now we need to check the conditions for each of the following cases: Monopoly Revenue Maximization Problem Case C Case B Case D () When ⏟ () When When neither Case B or C occur ⏟ found by 33 ECO 204 Chapter 16: Analysis of Firms with Market Power (this version 2012-2013) University of Toronto, Department of Economics (STG). ECO 204, S. Ajaz Hussain. Do not distribute. () () Now: , , ( , ) Let’s check when Case B can occur: () ( , , ) ( ) ( ) If case B occurs the price will be given by: , , The Lagrange multipliers will be: () , Let’s check when Case C can occur: () This is not ( , ) , so that the PDS will always produce a positive output. If neither case B or C have occur (which means that as long as case the output will be: ) then the solution must be Case D in which ( , ) , ( , ) , ( ) , In case D the Lagrange multipliers will be: 34 ECO 204 Chapter 16: Analysis of Firms with Market Power (this version 2012-2013) University of Toronto, Department of Economics (STG). ECO 204, S. Ajaz Hussain. Do not distribute. ________________________________________________________...
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This document was uploaded on 01/19/2014.

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