Question
A monopolist with marginal costs MC(q)= c is facing a demand Q=a p^-3 . (a) Calculate the optimal price and quantity and the net profits
A monopolist with marginal costs MC(q)= c is facing a demand Q=a p^-3 .
(a) Calculate the optimal price and quantity and the net profits when c = 2 and a = 2700.
How does the optimal monopoly price change (increase/decrease/stays the same) when
(b) MC increases; that is, c increases?
(c) The demand shifts right, that is, a increases?
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Managerial Economics
Authors: Luke M. Froeb, Brian T. McCann, Michael R. Ward
5th Edition
1337106666, 978-1337106665
