Question
A monopolist firm comes to you for your consulting services. After some research you find they face the following demand function: Q = 2,000 -
A monopolist firm comes to you for your consulting services. After some research you find they face the following demand function:
Q = 2,000 - 4P
a) They currently are offering their product at $200. What is the own price elasticity of demand at this point? Is demand price elastic, inelastic, or unitary elastic?
b) What is the function of total revenue? (Hint: P = 500 - 0.25Q)
c) What is the marginal revenue?
d) At what quantity does the firm maximize revenue? What is revenue at this point?
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Managerial Economics
Authors: Mark Hirschey
14th edition
9781473709263, 1473709261, 1473717343, 1473717345, 978-1305506381
