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Sergio [31]
3 years ago
6

A monopoly market is characterized by the inverse demand curve P = 1,200 – 40 Q and a constant marginal cost of $200. If the mar

ginal cost of production rises to $400, the profit-maximizing output level _____ units and the price rises by _____.
Business
1 answer:
Sergeeva-Olga [200]3 years ago
4 0

Answer:

The profit maximizing output level declines by 2.5 units and the price rises by $100.

Explanation:

In a monopoly market the inverse demand curve is given as,

P = 1,200 - 40Q

The marginal cost of production of the last unit is $200.

The total revenue is

= Price\times Quantity

= 1,200Q - 40Q^{2}

The marginal revenue of the last unit is

= \frac{d}{dx} TR

= 1,200 - 80Q

At equilibrium the marginal revenue is equal to marginal price,

MR = MC

1,200 - 80Q = 200

80Q = 1,000

Q = 12.5

Putting the value of Q in the inverse demand function,

P = 1,200 - 40\times 12.5

P = $700

Now, if the marginal cost rises to $400,

At equilibrium the marginal revenue is equal to marginal price,

MR = MC

1,200 - 80Q = 400

80Q = 800

Q = 10

Putting the value of Q in the inverse demand function,

P = 1,200 - 40\times 10

P = $800

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Which is an example of a demand account?
Tamiku [17]

A demand deposit is an account with a bank or other financial institution that allows the depositor to withdraw his or her funds from the account without warning.

Answer is D. checking account as they allow the depositor to withdraw funds at any time.

7 0
3 years ago
Read 2 more answers
) A company finds that consumer demand quantity changes with respect to price at a rate given by D'(p) = - 2000 p 2 . Find the d
Stells [14]

Answer:

D(p) = 2,000 ÷ Price + 434

Explanation:

The computation of the demand function is shown below:-

Number of units of the product = 3000 ÷ Price + C

834 = 2,000 ÷ $5 + C

834 = 400 + C

C = 834 - 400

C = 434

So, D(p) = 2,000 ÷ Price + 434

Therefore for computing the demand function we simply applied the above formula also we considered all the given information mentioned in the question

3 0
3 years ago
1. The most recent trends in health care expenditures may be characterized as: A. Rapidly increasing B. Far exceeding growth in
Tasya [4]

Answer:

A. Rapidly increasing

3 0
3 years ago
Melanie has a choice of driving or flying from Durham, North Carolina to Knoxville, Tennessee for a one-day business trip. If sh
Elis [28]

Answer:

Correct option is (b)

Explanation:

Time available for work if Melanie chooses to travel by air = 7 hours

Income per hour = $40

Total income earned if chooses to travel by air = 40 × 7 = $280

Time available for work if Melanie chooses to drive = 4 hours

Total income earned if chooses to drive = 40 × 4 = $160

Price differential = 280 - 160 = $120

As a rational decision maker, Melanie will choose to fly over drive only if her price differential is below $120. She will choose to drive if price differential is above $120.

4 0
2 years ago
Matt Enterprises issued $200,000 of ten percent, five-year bonds with interest payable semiannually. Determine the issue price i
Julli [10]

Answer:

$200,000 ; $234,120.81  ; and $185,279.83

Explanation:

For computing the issue price we need to applied the future value which is shown in the attachment below:

a. Given that,  

Future value = $200,000

Rate of interest = 10%  ÷ 2 = 5%

NPER = 5  years  × 2 = 10 years

PMT = $200,000 × 10%   ÷ 2 = $10,000

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, applying the formula the issued price is $200,000

b. Given that,  

Future value = $200,000

Rate of interest = 6%  ÷ 2 = 3%

NPER = 5  years  × 2 = 10 years

PMT = $200,000 × 10%   ÷ 2 = $10,000

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, applying the formula the issued price is $234,120.81

c. Given that,  

Future value = $200,000

Rate of interest = 12%  ÷ 2 = 6%

NPER = 5  years  × 2 = 10 years

PMT = $200,000 × 10%   ÷ 2 = $10,000

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, applying the formula the issued price is $185,279.83

5 0
3 years ago
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