Transcript from Paris, France to Vienna, Austria is in the range of

I think the distance (as the crow
flies) from Paris, France to
Vienna, Austria is in the range of:
2000-2500 miles
1200-2000 miles
900-1200 miles
700-900 miles
600-700 miles
500-600 miles
400-500 miles
300-400 miles
200-300 miles
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70
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m
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9.
The distance (as the crow flies)
from Paris, France to Vienna,
Austria is in the range of:
2000-2500 miles
1200-2000 miles
900-1200 miles
700-900 miles
600-700 miles
500-600 miles
400-500 miles
300-400 miles
200-300 miles
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20
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90
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The distance (as the crow flies)
from Paris, France to Vienna,
Austria is in the range of:
2000-2500 miles
1200-2000 miles
900-1200 miles
700-900 miles
600-700 miles
500-600 miles
400-500 miles
300-400 miles
200-300 miles
0%
0%
0%
0%
0%
0%
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0%
0%
20
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-2
50
0
12
m
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-2
s
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0
90
m
ile
012
s
00
m
70
ile
0s
90
0
m
60
ile
0s
70
0
m
50
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0s
60
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What is it exactly? 642 miles
Based on Weds. Survey, what price
should Apple set to maximize its total
revenue from sales of IPODs to this
class?
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15
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35
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30
$400
$350
$300
$250
$200
$150
40
1.
2.
3.
4.
5.
6.
If you haven’t done so, go to the class
website. Find this assignment. Get the
data from our survey and answer the
questions that are posed there.
We will ask these questions as clicker
questions in class on Monday.
A monopolist is currently selling
50 units at $100 each. In order to
sell one more unit, he would have
to cut the price to $99. What is
his marginal revenue?
1.
2.
3.
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6.
$100
$99
$75
$49
$29
$0
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Why is that?
• To sell one more unit he needs to cut price
by $1. He gets $99 for the extra unit he
sells, but he loses $1 on each of the 50 units
he was selling at $100. So his marginal
revenue is $99-50=$49.
If demand for a monopolist’s product is
inelastic at the current price, he could
increase his profits by reducing output,
even if his marginal cost is very small.
1. True
2. False
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0%
Why is that?
• If demand is inelastic, then a small price
increase and the resulting quantity decrease
must increase revenue.
So by cutting back quantity he increases
revenue. Reducing quantity certainly won’t
increase his costs, so his profit must
increase.
The demand curve has the
equation P=100-2Q. At what
quantity is marginal revenue
equal to zero?
1.
2.
3.
4.
5.
Q=80
Q=60
Q=50
Q=40
Q=25
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With linear demand, MR is a
straight line with same intercept,
twice as steep as demand.
MR=100-4Q
100
Green Line Demand Curve
100-2Q
Pink Line MR curve,
100-4Q
25
50