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Final

EXAM PRACTICE QUESTIONS 10

4 Pages
270 Views

Department
Economics
Course Code
ECO200Y5
Professor
Robert Barber

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TUTORIAL 11MONDAYJULY 14 2014 4PM5PM QUESTION 113pp 405406 A single firm monopolizes the entire market for Batman masks and can produce at constant average and marginal costs of ACMC10 Originally the firm faces a market demand curve given byQ60Pand a marginal revenue function given byMR602Qa Calculate the profitmaximizing pricequantity combination for the firm What are the firms profitsb Now assume that the market demand curve becomes steeper and is given by Q4505Pwith the marginal revenue function given byMR904QWhat is the firms profitmaximizing pricequantity combination now What are the firms profitsc Instead of the assumptions in part b assume that the market demand curve becomes flatter and is given by Q1002Pwith the marginal revenue function given byMR50QWhat is the firms profitmaximizing pricequantity combination now What are the firms profitsd Graph the three different situations of part a part b and part c Using your results explain why there is no meaningful supply curve for this firms mask monopoly
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