ECO 550 Chapter 11 Unique Creations holds a monopoly position in the production and sale of magnometers. The cost function facing Unique is estimated to be

TC 100,000 20Q

A. What is the marginal cost for Unique?

B. If the price elasticity of demand for Unique is currently -1.5, what price should Unique charge?

C. What is the marginal revenue at the price computed in Part (b)?

Answer

Unique Creations holds a monopoly position in the production and sale of magnometers. The cost function facing Unique is estimated to be

TC 100,000 20Q

A. What is the marginal cost for Unique?

MC dTC/dQ 20-the first derivative of TC

B. If the price elasticity of demand for Unique is currently -1.5, what price should Unique charge?

e -1.5

In equilibrium MC Mr

MR P( 11/e) P( 1-1/1.5)...