Lecture Notes on Pricing in Perfectly Competitive Markets
Lalith Munasinghe
Supply, Demand and Equilibrium Prices
In the previous lectures we have alluded to market prices, but we
have not addressed the question of how these market prices are
determined.
Lectures Notes on Monopoly Markets, Market Separation, and Pricing
Lalith Munasinghe
Models of Monopoly Markets
In perfectly competitive markets a firms output decision does not
affect the market price of the good. The monopolys output decisions
however w
Lecture Notes on Long-Run Production Theory and Cost Minimization
Lalith Munasinghe
Now consider what happens when firms can adjust both their K and L
inputs. This is called the long run analysis. The term long run (LR) is a
stand-in term that implies we
Economics BC1007
Barnard College
Spring 2017
Professor Harrison
Sample Problems 4 Solution
1. PE 4.5, pages 177
a) question 3(a)
b) question 15
c) question 18
d) question 26
2. PE 4.6 page 179
a) question 12
b) question 22
3. PE 4.10 page 188-189
a) quest
Economics BC1007
Barnard College
Spring 2017
Professor Harrison
Sample Problems 5 Solution
1. Consider
, where
a) and b) f(x) in red
Tangent at x = 0 coincides with the x-axis
Tangents at x = 1 and x = -1 in blue
Tangents at x = 2 and x = -2 in green
c) w
Economics BC1007
Barnard College
Spring 2017
Professor Harrison
Sample Problems 1 Solution
1. Progress Exercises (PE) 1.1, page 10, question 13.
2 x (2)(2) (x)(x) 4 x 2 4 x 2 4
2 = 2
= x
= 2
=
x 2
2x
2x
x
x
2. Simplify.
1 y x
1
1 y y(1 y x) + x(1) y
Economics BC1007
Barnard College
Spring 2017
Professor Harrison
Sample Problems 3: Chapter 3
1. PE 3.1, page 111
(a)
(b)
(c)
(d)
question
question
question
question
9. Please also plot the two lines and show the intersection.
12
14
21
2. PE 3.2, pages 117
Economics BC1007
Barnard College
Spring 2017
Professor Harrison
Sample Problems 5: Sections 6.1 and 6.2
1. Consider the function
= () = 2
that we used in class. We found that
= 2
(a) Graph the function for between 3 and 3Label the points where = 2 1 0 1
Economics BC1007
Barnard College
Spring 2017
Professor Harrison
Sample Problems 2: Chapter 2
(All page numbers refer to the hard copy of the text.)
1. Progress Exercises (PE) 2.2, page 54, question 2d
2. PE 2.3, pages 68-70
(a) question 3
(b) question 4
(
Economics BC1007
Barnard College
Spring 2017
Professor Harrison
Sample Problems 4
Chapter 4
1. PE 4.5, pages 177-8
(a) question 3(a)
(b) question 15
(c) question 18
(d) question 26
2. PE 4.6, page 179. Note that the term in [ ] is not multiplied by the ri
Economics BC1007
Barnard College
Spring 2016
Name:
Midterm 1 Solution (77 points)
Round to the 2nd decimal place
SHOW ALL YOUR WORK!
1. (19 points) Solve for x.
a) (3 points)
log 5 (25 x ) = 4 ! 25 x = 5 4 ! (5 2 ) x = (5 2 ) 2 !
a) (8 points)
(x +1)(x
Economics BC1007
Barnard College
Spring 2016
Name:
Midterm 1 (77 points)
Round to the 2 decimal place
SHOW ALL YOUR WORK!
nd
1. (19 points) Solve for x.
a) (3 points)
log 5 (25 x ) = 4
a) (8 points)
(x +1)(x 3)(x 5)(x 7)
=0
3x 2 30x + 63
b) (8 points)
Economics BC1007
Barnard College
Spring 2016
Name:
Midterm 2 (90 points)
Round to the 2nd decimal place
SHOW ALL YOUR WORK!
1. (17 points) Find the derivative. Simplify where possible.
a) (3 points) y = ln(x 3 )
b) (7 points) y =
x
ln(x 3 )
c) (7 points
BC3035: Microeconomic Theory
Problem Set #4
1. David N. gets $3 per week as an allowance to spend any way he pleases. Because he
likes only peanut butter and jelly sandwiches, he spends the entire amount on peanut
butter (at $0.05 per ounce) and jelly ($0
BC3035: Microeconomic Theory
Problem Set #1: Math and Optimization Problems
1.
For the following, determine the dependent variable, the independent
variable, the intercept and the slope. Draw their graphs.
a.
b.
c.
d.
2.
y
q
x
y
=
=
+
=
3+x
-40 + 86p
2y =
Lecture Notes on Pricing Policies with Market Power
Lalith Munasinghe
Introduction
We now consider a more complex array of pricing strategies in the
context where a firm has market power. We have thus far looked at
two pricing policies when a firm has mon
Monopoly, pricing, uncertainty and signaling:
Problem Set #9
1. A monopolist sells travel services to two groups of people with the following
demand curves Q1 = 100 2P1 (and MR1 = 50 Q1) and Q2 = 60 P2 (and MR2 = 60
2Q2) . The marginal cost of providing
BC3035: Microeconomic Theory, Problem Set #8
1. A monopolist can produce at constant average and marginal costs of AC=MC=5. The
firm faces a market demand curve given by Q = 53P.
a) Calculate the profit maximizing price quantity combination for the monopo
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Lecture Notes on Decision Making under Uncertainty
Instructor: Lalith Munasinghe
Introduction
Decision analysis is concerned with decision making when the economic environment is
uncertain. For example, a company must decide whether to introduce a new pro
Lecture notes on Time Preference (Individual Discount Rates), Present
Values, and Human Capital Investments
Instructor: Lalith Munasinghe
To motivate computation of present values we will consider an individuals
decision on whether or not to go to College
BC3035: Microeconomic Theory, Problem Set #6
1. From the table given below, compute the marginal product of labor. What can you
say about the shape of the marginal product curve?
Labor units
0
1
2
3
4
5
6
7 or more
Total Output
0
50
125
195
255
310
350
35
Lecture Notes on Short-Run Cost Curve
Lalith Munasinghe
The distinction between the Short-Run (SR) and Long-Run (LR) in
production theory hinges on the degree of input flexibility. SR represents a
time frame where a firm is unable to change the levels of
Lecture Notes on Short-Run Producer Theory and Profit Maximization
Lalith Munasinghe
Production Functions
We begin with a few definitions.
Firm: An organization that turns inputs into outputs.
Production Function (PF): The mathematical relationship betwee