Exercise 4 Consider a monopolist operating a car park. Customers purchase monthly parking passes. Demand for passes is Q = 520-2p, where p is the price of a monthly pass. The monopolist's only costs are the wages paid to the parking custodians. The monopolist must pay £10 in wages for each parking pass sold. (a) (b) (c) Find the equations for the marginal revenue and marginal cost curves. Suppose there is room for 400 cars in the car park. Which price maximizes revenue? Find une prote-maximizing price, quantity, and profit. At the profit-maximizing price and quantity, is the monopolist's markup equal to the inverse of the absolute value of the demand elasticity? Suppose there is room for 200 cars in the car park. Find the profit-maximizing price, quantity, and profit. At the profit-maximizing price and quantity, is the monopolist's markup equal to the inverse of the absolute value of the demand elasticity? Explain.

Exercise 4 Consider a monopolist operating a car park. Customers purchase monthly parking passes. Demand for passes is Q = 520-2p, where p is the price of a monthly pass. The monopolist's only costs are the wages paid to the parking custodians. The monopolist must pay £10 in wages for each parking pass sold. (a) (b) (c) Find the equations for the marginal revenue and marginal cost curves. Suppose there is room for 400 cars in the car park. Which price maximizes revenue? Find une prote-maximizing price, quantity, and profit. At the profit-maximizing price and quantity, is the monopolist's markup equal to the inverse of the absolute value of the demand elasticity? Suppose there is room for 200 cars in the car park. Find the profit-maximizing price, quantity, and profit. At the profit-maximizing price and quantity, is the monopolist's markup equal to the inverse of the absolute value of the demand elasticity? Explain.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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