ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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A monopolist with cost function C(q) = ;q? faces 2 consumers with the following
demands: p(q1) = 10 - q1 and p(q2) = 20 – 2q2.
Determine prices, quantities to be produced and sold and the monopolist's profits in
the following cases:
(a) The good can be resold at zero cost among consumers and it is technologically
impossible to sell it in bundles of more than 1 unit.
b) There is resale at zero cost and bundling in packages of arbitrary size.
c) Resale is possible at a cost of "t" per unit.
d) The good is a personal and non-transferable service.
e) Repeat the above analysis, but this time assuming that costs are C(q) = q with q < 8.
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Transcribed Image Text:A monopolist with cost function C(q) = ;q? faces 2 consumers with the following demands: p(q1) = 10 - q1 and p(q2) = 20 – 2q2. Determine prices, quantities to be produced and sold and the monopolist's profits in the following cases: (a) The good can be resold at zero cost among consumers and it is technologically impossible to sell it in bundles of more than 1 unit. b) There is resale at zero cost and bundling in packages of arbitrary size. c) Resale is possible at a cost of "t" per unit. d) The good is a personal and non-transferable service. e) Repeat the above analysis, but this time assuming that costs are C(q) = q with q < 8.
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