Homework #6,  Econ 612, 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.