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Homework Help: Calculate the elasticit

  1. Feb 15, 2010 #1
    1. The problem statement, all variables and given/known data

    A monopolist faces demand y=96-4p and has total costs c=10y.
    a) derive the marginal cost and marginal revenue functions.
    b) what is the profit-maximizing output and price for this monopolist?
    c) Suppose p=10 and MR=5, calculate the elasticit.

    Any feedback would be greatly appreciated.

    2. Relevant equations



    3. The attempt at a solution
     
  2. jcsd
  3. Feb 16, 2010 #2

    danago

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    Re: Economics

    Do you know the definition of marginal cost and marginal revenue?
     
  4. Feb 16, 2010 #3
    Re: Economics

    I have an idea of what they mean, but im having a hard time finding them for this problem.
     
  5. Feb 16, 2010 #4

    vela

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    Re: Economics

    So what do they mean? Show us what attempts have you made to figure them out.
     
  6. Feb 16, 2010 #5
    Re: Economics

    What i did to find the marginal revenue was divide the derivative of the total revenue by the derivative of the quantity function. d(96p-4p^2)/d(96-4p)=96-4p/-4=-24+p. Thats what i got for the marginal revenue.

    For the marginal cost, i divided the derivative of the cost function by the derivative of the quantity function. 10/-4 was the result i got for the marginal cost function.
     
  7. Feb 16, 2010 #6

    vela

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    Re: Economics

    Can you state in words what marginal cost is and what marginal revenue is? I can't tell if you don't have a clear concept of what those quantities are or if you just don't know how to represent them mathematically.
     
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