Start learning 50% faster. Sign in now
To determine the profit-maximizing price for a monopolist facing a downward sloping linear market demand curve with zero variable cost, we need to understand how monopolists set prices. 1. Demand Curve and Revenue : The demand curve for a monopolist is downward sloping, indicating that the price decreases as quantity increases. The monopolist will choose the quantity where marginal revenue (MR) equals marginal cost (MC). In this case, MC is zero. 2. Marginal Revenue : The MR curve for a linear demand curve lies below the demand curve and has twice the slope of the demand curve. 3. Profit Maximization : The monopolist maximizes profit where MR = MC. Since MC is zero, the monopolist will produce the quantity where MR = 0. For a linear demand curve, the MR curve intersects the horizontal axis (MR = 0) at the midpoint of the demand curve. This is where the price elasticity of demand is unitary elastic (elasticity = -1). Thus, the profit-maximizing price will be at the point where the demand curve is unitary elastic.
Which regulatory body introduced the asset class under which Mutual Funds Lite (MF Lite) schemes would fall, offering greater flexibility to investors i...
Find the ODD one out from the given options.
Which organization oversees the Unified Recovery Interface (URI) aimed at improving banks' recovery processes?
What is the primary role of SECL's Post-Retirement Benefit (PRB) Cell?
What was the percentage decline in Indian companies' foreign borrowings in 2024?
Which state government has increased the upper age limit by five years for the government job aspirants from the year 2022?
What achievement did Aman Sehrawat accomplish at the Paris 2024 Olympics?
Which flying squirrel resurfaced in Arunachal Pradesh recently, and when was it last described?
PM Mitra Mega Textile Park will be set up in how many states?
The World Bank has approved a grant of _____ to set up an integrated road safety enforcement system in Shimla and Nurpur police districts and develop ...