Based on the best available econometric estimates, the market elasticity of demand for your firm's product is -1.5. The marginal cost of producing the product is constant at $150, while average total cost at current production levels is $215. Determine your optimal per unit price if: Instructions: Enter your responses rounded to two decimal places. a. you are a monopolist. $ 450 b. you compete against one other firm in a Cournot oligopoly. $ 225 c. you compete against 19 other firms in a Cournot oligopoly. $ 145

Based on the best available econometric estimates, the market elasticity of demand for your firm's product is -1.5. The marginal cost of producing the product is constant at $150, while average total cost at current production levels is $215. Determine your optimal per unit price if: Instructions: Enter your responses rounded to two decimal places. a. you are a monopolist. $ 450 b. you compete against one other firm in a Cournot oligopoly. $ 225 c. you compete against 19 other firms in a Cournot oligopoly. $ 145

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter12: More Realistic And Complex Pricing

Section: Chapter Questions

Problem 12.1IP

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