Purchase Solution

Managerial Economics - Optimal Output and Pricing

Not what you're looking for?

Ask Custom Question

Your local monopoly is considering selling several units of homogeneous product as a single package. A typical consumer's inverse demand function is P = 200 - 4Q. Marginal cost is $120.
a. Determine the optimal number of units to put in a package.
b. How much should the firm charge for this package?

Purchase this Solution
Solution Summary

This solution shows how to use marginal analysis to calculate a firm's profit-maximizing Quantity and Price.

Solution Preview

The monopoly maximizes its profit at the quantity where Marginal Revenue (MR) = Marginal Cost (MC).

To find MR, ...

Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

View More Free Quizzes
Related BrainMass Solutions

  • Cost-Plus Pricing: Calculating % Markup at Optimal Q and P

    472249 Managerial Economics Let a firm's demand be given by: Q=100-P. Let the firm's marginal cost be $2 per unit of production. Solve for the firm's marginal revenue equation and optimal output/price combination.

  • Micro and Macroeconomics Inquiry

    Concepts-------------------->|Managerial Economics|---->|Optimal Solutions to the Problems| Decision Sciences---------------------->|-------------------------| |---------------------------------------| Management Decision Problems (business

  • The Managerial Economics of Business Investment

    Theory of market structure and pricing studies the interaction of the different market players with prices and on the demand for the goods or service. Lastly, in the simplest terms, managerial economics in business investment is applied economics.

  • Finding total revenue and profit at optimal output level

    377254 Managerial Economics and total revenue 1. Use the "graph attached" What is the firm's Total Revenue at the profit maximizing level of output 32 0 16 8 14 Not enough information 2.

  • Managerial Economics - Optimal output and price

    182461 Managerial Economics - Optimal output and price Please see attached file for complete questions. The locust corporation is composed of a marketing division and a production division.

  • assess price increase

    16364 Managerial Economics: Assess Price Increase My questions are same problems on the Managerial Economics -theory,applications and cases by Edwin Mansfield (5th edtion) ** Please see the attached file for the complete solution response ** a.

  • Managerial Economics: Calculating Maximum Profit and Revenue

    372146 Managerial Economics: Calculating Maximum Profit and Revenue A monopolist's demand function is given by P = 80-3Q (with MR = 80-6Q). Its total cost function is TC = 20Q + 200 (with MC = 20).

  • Economics: Optimal pricing.

    336313 MBA Managerial Economics - Maximum Profit and Optimal Pricing You are the manager of a firm that produces products X and Y at zero cost.

  • Strategy Simulation Game (Tata Interactive System)

    Economics for Managerial Decision Making.

View More Related Solutions