4) A monopolist faces a market demand function: Qd = 24 – 0.2P and marginal cost: MC = 12. Answer the following (25 pts): a. If the monopolist employs a

4) A monopolist faces a market demand function: Qd = 24 – 0.2P and marginal cost: MC = 12. Answer
the following (25 pts):
a. If the monopolist employs a single price strategy, what is the optimal quantity produced and
price charged (5 pts)?
b. is the elasticity demand given this strategy (5 pts)?
c. If other firms trying to enter this market had slightly higher cost structures, what would be a
good price & quantity mix to limit entry of competition and why (5 pts)?
d. If the monopolist could accurately access each consumers’ value for its good, what price range
would it charge to its various customers and how much would it produce in total (5 pts)?
e. are the profits from part a & part d? Which pricing strategy is preferred (5 pts)?
f. EC: Briefly explain why a firm that offers a buy-one, get-one free (BOGO) deal, does not just
offer that same product at a 50% discount of the normal stated price (3 pts)?

Do you need us to help you on this or any other assignment?


Make an Order Now
0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published.