5 Problems

1. (a) Using calculus, derive the relationship between a monopolist's marginal revenue, the monopolists' price, and the price elasticity of demand. (b) Consider a monopolist who produces output at a constant marginal and average cost of $12. The price elasticity for the monopolist's product is 3. Use your answer to (a) to find the monopolist's profit maximizing price. 2. Bob's pharmaceutical company has developed a dew drug, Econosil, which helps students relax during economics exams.* A paten was obtained which entitles Bob to be the sold producer of Econosil. Bob's cost function for producing this new drug is given by C(Q) = 20Q, where Q is the number of capsules produced (in thousand... click for more

The aggregate consumption function

EVERYTHING MUST HAVE CHARTS IN EXCEL. The aggregate consumption function for an economy is: C=$200 billion + .75 Yd, Yd= disposable income. Assume that aggregate demand must shift by $160 billion to close a recesionary gap. A: what change in government spending will return the economy to full employment GDP? B: By how much will taxes have to change to close the GDP gap? C: the government has decided to finance the increased expenditures necessary to close the gdp gap, by increasing taxes. What will be the necessary changes in govt spending and taxes to close the GDP gap? Why? 1.) Suppose bank reserves are $100 billion. The required reserve ratio... click for more

Economics & Quotas

What role does the government play when it comes to quotas? Can you explain, in economic terms, how quotas work? I've looked at some diagrams but do not understand them. How do quotas affect international trade & domestic manufactures? Who wins when quotas are used?

Question

A gas firm takes over one of its inital suppliers in a merger. This is a sample of: (vertical, horizontal,conglomerate interation, cointegration)

eCommerce

What type of market structure does Amazon have? Can any of the economic ratios or indices be applied to Amazon (four-firm concentration ratio, Herfindahl-Hirschman index, Lerner index, Rothschild index)?