Consider a country with the following aggregate demand curve for cars. Q = 2000 - 20.P There

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Consider a country with the following aggregate demand curve for cars. Q = 2000 - 20.P There is an industry with following marginal and average cost curves. MC = 20 + 0.01 Q AC = 10 + 0.005

Q Assume that the industry is a monopoly and there is no free trade.

a. What is the monopolist's marginal revenue curve?

b. What is the monopolist's profit maximizing output?

c. What is the profit maximizing price?

d. What is the profit?

e. Show this in a diagram. Assume that the industry is a perfectly competitive one, and there is no free trade.

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Microeconomics and Behavior

ISBN: 978-0078021695

9th edition

Authors: Robert Frank

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Question Posted: Aug 08, 2017 09:46 AM

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Consider a country with the following aggregate demand curve for cars. Q = 2000 - 20.P There

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Step by Step Answer:

a Q 2000 20P Rearranging the demand equation in terms of price we get 20P 2000 ...View the full answer

Microeconomics and Behavior

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