58 591
Assignments Done
Successfully Done
In March 2018
Your physics homework can be a real challenge, and the due date can be really close — feel free to use our assistance and get the desired result.
Be sure that math assignments completed by our experts will be error-free and done according to your instructions specified in the submitted order form.
Our experts will gladly share their knowledge and help you with programming homework. Keep up with the world’s newest programming trends.

Answer on Microeconomics Question for abdullah

Question #42271
Hamed Holding is the sole producer and seller of widgets in the economy. Widgets can be produced with a constant returns technology at a cost of 20 OR. The demand for widgets is such that the price elasticity of demand is 1.5.
20 a. What price would Aziz Holding charge if it were to maximize its profits?
10 b. What would be the market price if this were a competitive market (with many other firms all having the same technology)?
Expert's answer
If ATC = MC = 20 and Ed = 1.5, the monopolist’s pricing rule as a function of the elasticity of demand for its product is:
(P - MC)/P = 1/Ed
1 - 20/P = 2/3
20/P = 1/3
P = $60.

For competitive market MR = MC = P = $20, so the price will be 3 times lower and no one will have profit.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!


No comments. Be first!

Leave a comment

Ask Your question