Economics Experiment

1 / 9

# Economics Experiment - PowerPoint PPT Presentation

Economics Experiment.

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.

## PowerPoint Slideshow about 'Economics Experiment' - zahur

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

### 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.

web.econ.ucsb.edu/study/signup

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?
• 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.
• 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?
• 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

100

Green Line Demand Curve

100-2Q

Pink Line MR curve,

100-4Q

25

50

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

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