Explore BrainMass
Share

Average Revenue, Marginal Revenue, and Marginal Cost

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

Having trouble understading the equations and concept.

See attachment for full problem description with proper symbols.

---
Micro
1. . Monopoly producer has a total cost function C = 66 + 2Q + Q2 (Hint: MC = 2 + 2Q). Demand for its product is Q = 10 - 0.2P (Hint: MR = 10 - 0.4P).

a. Compute and graph Average Revenue, Marginal Revenue, and Marginal Cost.
b. What are the profit-maximizing output level, price, and profits?
---
1. Two slumlords own rows of houses on opposite sides of the street. Each would gain if the other upgraded his own property, but neither wants to upgrade until the other does. Relate this situation to the Prisoner's Dilemma, and provide a table showing the situation of both landlords. Make up numerical examples as appropriate.
---

https://brainmass.com/economics/pricing-output-decisions/average-revenue-marginal-revenue-marginal-cost-58987

Solution Preview

See the attached file. Thanks

1. Two slumlords own rows of houses on opposite sides of the street. Each would gain if the other upgraded his own property, but neither wants to upgrade until the other does. Relate this situation to the Prisoner's Dilemma, and provide a table showing the situation of both landlords. Make up numerical examples as appropriate.

In prisoner's dilemma case, both players may gain or lose depending on actions each chooses to take. The dominant strategy in this situation is not to upgrade.

Numerical example:
Suppose the two landlords are A and B. The cost of up-gradation ...

Solution Summary

The expert determines the average revenue, marginal revenue, and marginal costs.

\$2.19