350 50 price x 7 quantity 3. Calculate the total cost at the profit maximizing.
Econ 171 2 marginal revenue the only firm in the market market demand is the firm s demand output decisions affect market clearing price unit quantity.
Non price discriminating monopoly graph. Differences in price elasticity of demand. Calculate the profit or loss at the profit. Calculate the total revenue at the profit maximizing price and quantity.
Here are the main conditions required for discriminatory pricing. Identify the profit maximizing price and quantity. Is the monopolist pareto efficient.
From the graph 2 2 the monopoly price is set well above the average total cost atc earning the firm supernormal profits. Show 160 your work when asked to calculate 1. There must be a different price elasticity of demand for each group of consumers the firm is then able to charge a higher price to the group with a more price inelastic demand and a lower price to the group with a.
In this video i explain how to draw a monopoly with first degree price discrimination. In other words this is the socially optimal price in which the monopoly is producing at an allocatively efficient output level. Price 50 quantity 7 units 2.
Calculate the total cost at the profit maximizing price and quantity. Monopoly practice use the graph of a non price discriminating monopoly to answer the following questions. Non constant cost with price discrimination the procedure is.
Try pausing the video to see if you can show price consumer surplus. Do not include the average cost curves. The monopoly will earn maximum profits when the marginal revenue is equal to the marginal cost.
Discriminating monopoly or price discrimination occurs when a monop olist charges the same buyer different prices for the different units of a commodity even though these units are in fact homogeneous. Calculate the total revenue at the profit maximizing price and quantity. Monopoly practice use the graph below of a non price discriminating monopoly to answer the following questions.
Further down the graph where the demand curve meets the mc curve the price equals to mc. Identify the profit maximizing price and quantity. Calculate the total revenue at the profit mc maximizing price and quantity 100 atc 3.
Ap micro topic 4 2 monopoly part 1. Explain why or why not labeling the efficient output. Such a situation is described as perfectly discriminating monopoly.
It is more usual however to find that a monopolist sells identical products to different. Consider the non price discriminating monopoly. Monopoly use the graph of a non price discriminating monopoly to answer the following questions.
Ap micro topic 4 2 monopoly part 1. Show the effect of price ceiling slightly below the monopoly price. Graph a non price discriminating monopolist.
What are the main conditions necessary for price discrimination to work. Be sure to include all curves necessary to show the optimal output. Identify the profit maximizing price and 140 quantity 120 2.
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