Question: Based on the best available econometric estimates the market elasticity

Based on the best available econometric estimates, the market elasticity of demand for your firm’s product is 2. The marginal cost of producing the product is constant at $ 150, while average total cost at current production levels is $ 225. Determine your optimal per unit price if:
a. You are a monopolist.
b. You compete against one other firm in a Cournot oligopoly.
c. You compete against 19 other firms in a Cournot oligopoly.


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  • CreatedApril 18, 2014
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