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Suppose that you can sell as much of a product as you want at $100 per unit. Your marginal
cost is: MC=2Q. Your fixed cost is $50. What is the optimal output level? What is the
optimal output, if your fixed cost is $60?
Suppose your company produces one product and that you are currently at an output level
where your price elasticity is 0.5. Are you at the optimal output level for profit maximization? How can you tell?
Textbook publishers have traditionally produced both United States and international editions of most leading textbooks.
The United States version typically sells at a higher price than the international edition. (a) Discuss why publishers use this pricing plan. (b) Discuss
how the Internet might affect the ability of companies to implement this type of policy
All consumers have identical demand for a product. Each person’s demand curve is P
30-2Q. The marginal cost of production is $2. Devise a two-part tariff that will exhaust
all consumer surplus.
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