EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
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Question
Chapter 10, Problem 6SP
(a)
To determine
Determine the total revenue at each price and identify the marginal revenue as the price drops from one to another.
(b)
To determine
Identify the level of profit and profit-maximizing price of the record company.
(c)
To determine
The signing fee request by an agent for The Incentives from the record company.
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Students have asked these similar questions
a.
b.
If a firm's the price elasticity of demand (Eg) to be-3.5 and marginal cost (MC) is $15.
Using the mark-up rule, what is the optimal price for the firm to charge?
If the price elasticity of demand (En) changes to -3.0, and MC is still $15. Use the
mark-up rule to find the new optimal price for the firm to charge?
What is the defining feature of a Pure Selling Problem and what impact does it have
one the firm's goal to maximize profit?
For the Water Utility, it costs $50,000 per month to lease the land and equipment for the water treatment facility and pumping station and maintain the water supply system. It costs $10Q to deliver water to households (Q is thousands of gallons). The town’s monthly demand for water is QD = 5000 – 100P, where P is price.
Calculate the quantity of water, the price, total revenue, total cost, total profit, marginal revenue, marginal cost, the markup, the profit margin, and marginal profit at unregulated price and quantity of water. What price per gallon will they charge?
A publisher has the following table of demand for the next novel by one of its famous authors:
Price
Number of novel in demand
100
0
90
1
80
2
70
3
60
4
50
5
40
6
30
7
20
8
10
9
0
10
The author is paid $2 to write the book (Fixed Cost or FC) and the marginal cost (MC) of publishing it is a constant $10 per book.
a) Calculate the total revenue, total cost, and corresponding profits for each quantity. What quantity would a profit-maximizing publisher choose? What price would he set?
b) Calculate marginal revenue. How does marginal revenue compare to price? Explain.
c) Plot the marginal revenue (MR), marginal cost (MC), and demand (D) curves. At what quantity do the marginal revenue and marginal cost curves intersect? What does this mean?
d) Obtain the economic profits (EP) of this monopolist and graph.
Chapter 10 Solutions
EBK PRINCIPLES OF MICROECONOMICS (SECON
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