Question: Suppose a monopolist has the demand function Q = 1,000P-3. What is the monopolist's optimal markup of price above marginal cost?

Suppose a monopolist has the demand function Q = 1,000P-3. What is the monopolist's optimal markup of price above marginal cost?

Step by Step Solution

★★★★★

3.44 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

With demand Q 1000 P 3 elasticity along the dem... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

846-B-E-D-S (2326).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Q:

Suppose a monopolist has an inverse demand function given by P = 100Q-1/2. What is the monopolist's optimal markup of price above marginal cost?

Q:

You are an executive for Super Computer, Inc. (SC), which rents out super computers. SC receives a fixed rental payment per time period in exchange for the right to unlimited computing at a rate of P...

Q:

Suppose a monopolist has to purchase new equipment and his fixed costs increase. Explain what will happen to the monopolists profit-maximizing output quantity and the monopolists profits.

Q:

11.17. Suppose a monopolist has the demand function Q ! 1,000P"3 . What is the monopolists optimal markup of price above marginal cost?

Q:

A new restaurant - Uovo - has just opened in West LA. It is serving the upscale market, with truly outstanding pasta that is flown in overnight from Bologna, ltaly. Uovo offers a fixed-price menu...

Q:

A new restaurant - Uovo - has just opened in West LA. It is serving the upscale market, with truly outstanding pasta that is flown in overnight from Bologna, ltaly. Uovo offers a fixed-price menu...

Q:

A new restaurant - Uovo - has just opened in West LA. It is serving the upscale market, with truly outstanding pasta that is flown in overnight from Bologna, ltaly. Uovo offers a fixed-price menu...

Q:

A new restaurant name HONEY has just opened in South LA. It is serving the upscale market, with truly outstanding pasta that is flown in overnight from Italy. Honey offers a fixed price menu with...

Q:

1. Suppose there is an electric bike shop that faces the following demand function Q = 250 - .25 p + 4 ps , where Q is the quantity of e-bikes, p is the price of an e-bike, and ps is the price of a...

Q:

Please find the attached multiple choice questions: Answers and explanations please. 25. A firm in monopolistic market faces the following demand and total cost equations for its product as follows:...

Q:

(a) Propose a mechanism for the free-radical chlorination of ethane, (b) Calculate ÎHo for each step in this reaction. (c) Calculate the overall value of ÎHo for this reaction. hu CH3...

Q:

The shareholders equity section of Prioneer enterprises as of December 31, 2012, follows: Common stock (10,000 shares issued @ $6 par) $60,000 Additional paid-in capital (C/S) .. 100,000 Retained...

Q:

8.3 What is the difference between attributes and variables from the SQC point of view?

Q:

A seller entered into a contract with a buyer. At the end of the project, the seller was reimbursed for the cost of the project but received a low fee based on certain subjective criteria that were...

Q:

Suppose in Fiscalville there is no tax on the first $10,000 of income, but a 20 percent tax on earnings between $10,000 and $20,000 and a 30 percent tax on income between $20,000 and $30,000. Any...

Q:

The following are production possibilities tables for China and the United States. Assume that before specialization and trade the optimal product mix for China is alternative B and for the United...

Q:

Suppose that the comparative-cost ratios of two productsbaby formula and tuna fishare as follows in the hypothetical nations of Canswicki and Tunata: Canswicki: 1 can baby formula = 2 cans tuna fish...

Q:

The COVID-19 pandemic had changed the working lifestyle of many people. Work-fromhome policy had caused most workers to be more sedentary. We sit hours and hours in front of our computers and often...

Q:

A bond sells for $866.09 and has a coupon rate of 6.40 percent. If the bond has 14 years until maturity, what is the yield to maturity of the bond? Assume semiannual compounding. (Do not round...

Q:

Q1-Q5, thank you A box contains eight tickets labeled with numbers. The number on the tickets are -10, -5, -2, O, 0, 2, 2, 6. The expected value of the sample sum of the ticket labels in 4...