Homework #6,  Econ 611, Prof. Hanson

1. The following table describes the demand curve and cost curve facing a firm.

a. What is the fixed cost of production?

b. If this firm acted competitively, what would be its price and quantity?

c. If the firm acted as a monopolist, what would be its price and quantity?

P	Q	TC
18	0	20
16	1	20
14	2	22
12	3	26
10	4	32
8	5	40
6	6	50
4	7	62
2	8	76
0	9	92

2. Explain the reason for these price differences.  If price discrimination, say what parameter distinguishes the high from the low value customers

a. Amazon.com charges a different book price than less well known online booksellers.

b. People who renew their magazine subscriptions early pay a different price from those who renew late.

c. Resort hotels charge a different price in the summer versus the winter.

d. Thanksgiving day sales have lower prices than the rest of the year.