ECO200Y5 Study Guide - Final Guide: 6, Economic Surplus, Natural Monopoly
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Tutorial 11 - monday - july 14, 2014 - 4pm - 5pm. 405 - 406 constant average and marginal costs of ac = mc = 10. Originally, the firm faces a market demand curve given by. A single firm monopolizes the entire market for batman masks and can produce at and a marginal revenue function given by. Mr = 60 2q (a) calculate the profit maximizing price quantity combination for the firm. What are the firm"s profits? (b) now assume that the market demand curve becomes steeper and is given by. Q = 45 0. 5p with the marginal revenue function given by. What are the firm"s profits? (c) instead of the assumptions in part (b), assume that the market demand curve becomes flatter and is given by with the marginal revenue function given by. What are the firm"s profits? (d) graph the three different situations of part (a), part (b) and part (c).