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4. A monopolist has constant marginal costs at Re 1 per unit, and zero fixed costs. It faces the demand curve
D(p) =100/P ;p<=20 where p is price. 0 ;p > 20 What is the profit maximizing choice of output? (a) 20 (b) 5 (c) 1/99 (d) 10 S. If the government could set a price ceiling on the above monopolist (in Question No. 4) in order to force it to act as a competitor, what price should it set? (a) 10 (b) 20 (c) 1 (d) None of the above 11. Consider five urns numbered 1 to 5, where each urn contains 10 balls. Urn 1 has i defective balls and (10 - i) nondefective balls. In an experiment, an urn is selected at random, and then a ball is selected at random from that urn. What is the probability that a defective ball is selected? If the ball is defective, what is the probability that it came from urn 2? (a) 7/10; 2/5 (b) 3/10; 2/15 (c) 1/5; 3/25 (d) 3/5; 2/5 Need to confirm if the answers for Q4 AND Q5 are options (b) 5 and option (c) 1 respectively. And need detailed solution for Q11 ![]() |
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Question 11 was printed wrong, the second line should have read, Urn i has i defective balls. Now u will get your answer. On Sun, Mar 9, 2014 at 5:54 PM, Lucifer [via Discussion forum] <[hidden email]> wrote: 4. A monopolist has constant marginal costs at Re 1 per unit, and zero fixed costs. It faces the demand curve ... [show rest of quote] |
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How did you get the 4th one?
MR = MC P=100/Q TR= 100 MR=0 MC= Q ??? Please help! |
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In reply to this post by MohitG
@ashima
For such questions you have to check profit at each output.. case 1..if Q=20 then P=5 acc to demand function (TR)Total revenue=100 and (TC)Total cost is 20 (NP)Net Profit=100-20=80 case 2..if Q=5 then P=20 TR=100, TC=5 NP=95 case 3..if Q= 1/99 then P>20 (not possible coz of constraint on demand function if P>20 then Q=0) case 4...if Q=10 then P=10 TR=100, TC= 10 NP=90 therefore.ans is 5 |
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Okay thanks :)
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