管理经济学习题.docx

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Managerial Economics: Seminar 1 Exercises
1. The Shand company produces blank CD’s. The marginal cost of each CD is £20. Since there are many substitutes for the firm’s CD’s, the price elasticity of demand for CD’s is 2.
The chairman of the company believes that cost-plus pricing is appropriate for the firm He marks-up marginal costs by 100 per cent to obtain price. Calculate the price at which the firm sells its CD’s and comment on whether the chairman is correct.
Because of growing competition in the CD market, the price elasticity of demand for the firm’s CD’s increases to 3. The chairman continues to use the same cost-plus pricing strategy. Calculate the new price at which the CD’s are sold and comment on whether the chairman is correct.
2. A monopoly firm has a demand function Q = 80- 4P, and an average cost (AC) function of AC = 40Q-1 + 6, where P is price and Q is quantity.
derive the expression for the demand curve from the demand function
show that the marginal revenue curve is downward sloping from left to right
calculate the level of output, price, and profits, at the profit maximizing level of output, and comment on your results.
calculate the price elasticity of demand at the profit maximizing point on the demand curve, and comment on your results

3. Why will a monopolist’s profit maximis