3. Use the need schedule listed below to calculate complete revenue and marginal revenue at every quantity. Plot the demand, total‐revenue, and marginal-revenue curves, and also explain the relationships between them. Define why the marginal revenue the the 4th unit of calculation is $3.50, even though that price is $5. Use Chapter 6\"s total‐revenue test for price elasticity to designate the elastic and inelastic segment of her graphed need curve. What generalization have the right to you make regarding the relationship in between marginal revenue and also elasticity that demand? suppose the marginal price of succeeding units of output was zero. What output would certainly the profit‐seeking firm produce? Finally, usage your analysis to describe why a monopolist would never create in the inelastic region of demand.

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create table.Because TR is enhancing at a diminishing rate, mr is declining. When TR turns downward (starts decreasing), grandfather becomes negative.
1. Mean a pure monopolist is challenged with the need schedule shown below and the same price data together the vain producer questioned in problem 4 at the end of thing 10. Calculation the lacking total‐revenue and also marginal‐revenue amounts, and also determine the profit‐maximizing price and also profit‐maximizing output for this monopolist. What is the monopolist\"s profit? Verify your answer graphically and also by comparing total revenue and also total cost.
create table.Profit-maximizing price = $63; profit-maximizing quantity = 4 units; monopolist\"s benefit = $42.
2. Expect that a price‐discriminating monopolist has segregated its market into two teams of buyers. The first group described by the demand and also revenue data that you emerged for trouble 1. The demand and revenue data for the second group that buyers is shown in the accompanying table. Assume the MC is $13 in both markets and MC = ATC in ~ all calculation levels. What price will certainly the firm fee in each market? Based specifically on these 2 prices, i beg your pardon market has the higher price elasticity of demand? What will be this monopolist\"s complete economic profit?
Price in industry 1 = $48; price in market 2 = $33; the 2nd market has the greater price elasticity the demand; full economic profit = $330.
3. Assume that the most reliable production modern technology available because that making vitamin pills has the cost structure given in the adhering to table. Keep in mind that calculation is measured as the number of bottles the vitamins produced per day and that prices include a normal profit.a. What is ATC per unit because that each level of output listed in the table?b. Is this a decreasing‐cost industry? (Answer yes or no).c. Intend that the market price for a bottle of vitamin is $2.50 and also that at that price the complete market quantity demanded is 75,000,000 bottles. How many firms will there it is in in this industry?d. Intend that instead the sector quantity demanded at a price the $2.50 is only 75,000. How countless firms do you mean there to it is in in this industry?e. Testimonial your answers to components b, c, and d. Go the level of need determine this industry\"s industry structure?
(a) ATC per bottle is $4 per bottle at 25,000 bottles, $3 per bottle at 50,000 bottles, $2.50 per party at 75,000 units, and also $2.76 per bottle at 100,000 units. (b) No. (c) There will be 1000 firms in this industry. (d) There will certainly be one firm in this industry. (e) Yes.
4. A new production an innovation for making vitamins is invented by a college professor who decides not to patent it. Thus, that is accessible for anybody come copy and also put into use. The TC per bottle for manufacturing up come 100,000 bottles per day is provided in the complying with table.a. What is ATC because that each level of output listed in the table?b. Intend that because that each 25,000‐bottle every day rise in manufacturing above100,000 bottles per day, TC boosts by $5,000 (so that, for instance, 125,000 bottles per day would generate total costs the $85,000 and 150,000 bottles per day would generate full costs the $90,000). Is this a decreasing‐cost industry? c. Suppose that the price of a party of vitamins is $1.33 and also that at the price the full quantity inquiry by consumer is 75,000,000 bottles. How countless firms will certainly there it is in in this industry?d. Intend that instead the market quantity demanded at a price that $1.33 is only 75,000. How many firms perform you expect there to it is in in this industry?e. Review your answers to components b, c, and also d. Go the level of need determine this industry\"s market structure?f. Compare her answer to component d that this concern with her answer to part d of difficulty 3. Carry out both manufacturing technologies show continuous returns come scale?
a. ATC per party is $2.00 per party for 25,000 bottles, $1.40 per party for 50,000 bottles, $1 per party for 75,000 bottles, and also $0.80 per party for 100,000 bottles. B. Yes, this is a decreasing cost industry. C. Just one firm due to the fact that this is a natural syndicate situation. D. Only one firm because this is a natural syndicate situation. E. No, the level of demand does not determine this market\"s structure. F. No, the new technology that this difficulty shows economies of scale and also this industry is because of this a decreasing-cost industry.

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5. Mean you have actually been tasked v regulating a single monopoly firm that sells 50‐pound bags that concrete. The firm has fixed expenses of $10 million per year and a variable price of $1 every bag no matter how countless bags space produced. A. If this firm kept on increasing its calculation level, would certainly ATC every bag ever increase? Is this a decreasing‐cost industry?b. If girlfriend wished to control this monopoly by charging the socially optimal price, what price would certainly you charge? At the price, what would certainly be the dimension of the firm\"s profit or loss? would certainly the firm want to leave the industry?c. You discover out that if you collection the price at $2 per bag, consumer will demand 10 million bags. How huge will the firm\"s profit or loss be at the price?d. If consumers instead demanded 20 million bags at a price that $2 per bag, how huge would the firm\"s benefit or lose be?e. Intend that demand is perfect inelastic in ~ 20 million bags, so that consumers need 20 million bags no issue what the price is. What price should you charge if you desire the firm to earn only fair price of return? assume as always that TC consists of a common profit.
a. ATC will never ever increase. This is a decreasing price industry. B. Charge $1 per bag. At the price, the for sure would lose its $10 million fixed costs. This firm would be losing money and also will desire to leave the industry. C. The firm will break even (no profit or loss). D. The firm will make an financial profit the $10 million. E. You have to charge $1.50 per bag if you want this for sure to earn a fair rate of return.
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Online Learning facility to companion Essentials of Investments8th EditionAlan J. Marcus, Alex Kane, Zvi Bodie
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