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economics experiment

Economics Experiment

Are you interested in participating in an economics experiment where you will have chance to win a new iPod Touch (with video, wireless internet and 16GB storage) ? The experiment involves answering multiple-choice questions based on material in this course. The experiment will take place online.

If you are interested in participating, please go to the following web site for more information:

web.econ.ucsb.edu/study/signup

slide2

A monopolist is currently selling 50 units at $100 each. In order to sell one more unit, he would have to cut the price to $99. What is his marginal revenue?

  • $100
  • $99
  • $75
  • $49
  • $29
why is that
Why is that?
  • To sell one more unit he needs to cut price by $1. He gets $99 for the extra unit he sells, but he loses $1 on each of the 50 units he was selling at $100. So his marginal revenue is $99-50=$49.
the chairman of sotheby s was sent to jail for the crime of
The Chairman of Sotheby’s was sent to jail for the crime of
  • Price Discrimination
  • Art Forgery
  • Embezzlement
  • Colluding on Prices
  • Tax Evasion
the demand curve has the equation p 100 2q at what quantity is marginal revenue equal to zero
The demand curve has the equation P=100-2Q. At what quantity is marginal revenue equal to zero?
  • Q=80
  • Q=60
  • Q=50
  • Q=40
  • Q=25
with linear demand mr is a straight line with same intercept twice as steep as demand mr 100 4q
With linear demand, MR is a straight line with same intercept, twice as steep as demand.MR=100-4Q

100

Green Line Demand Curve

100-2Q

Pink Line MR curve,

100-4Q

25

50

slide8

A monopolist who is able to practice perfect price discrimination will sell more units than a monopolist who must charge the same price for every unit sold.

  • True
  • False
slide9

A monopolist who is able to practice perfect price discrimination will sell the same quantity that would be sold if the industry were competitive.

  • True
  • False
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