Online Economics Managerial class using Michael Baye's 5th edition book.
You are the manager of a monopoly, and your demand and cost functions are given by
P = 200 - 2Q and C(Q) = 2,000 + 3Q2, respectively.
a. What price-quantity combination maximizes your firm's profits?
b. Calculate the maximum profits.
c. Is demand elastic, inelastic, or unit elastic at the profit-maximizing price-quantity combination?
d. What price-quantity combination maximizes revenue?
e. Calculate the maximum revenues.
f. Is demand elastic, inelastic, or unit elastic at the revenue-maximizing price-quantity combination?
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Monopoly/Oligopoly problems are solved.
Economics: monopoly, oligopoly, cartel
-Explain the difference between a monopoly and an oligopoly, and a cartel.
-Provide an example of a monopoly, an oligopoly, and a cartel.
-What are the welfare effects of monopolies and oligopolies.
-How does game theory explain the interactions of firms within oligopolies and cartels?
-What is the economic purpose of OPEC. What has happened to oil prices over the past five years?
-Synthesize the information gathered and tell the economic consulting firm which actions you think OPEC will take over the next year.