×

### Let's log you in.

or

Don't have a StudySoup account? Create one here!

×

### Create a StudySoup account

#### Be part of our community, it's free to join!

or

##### By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

## PRIN MICROECONOMICS

by: Ms. Ari Lesch

13

0

3

# PRIN MICROECONOMICS ECON 101

Marketplace > Iowa State University > Economcs > ECON 101 > PRIN MICROECONOMICS
Ms. Ari Lesch
ISU
GPA 3.53

Staff

These notes were just uploaded, and will be ready to view shortly.

Purchase these notes here, or revisit this page.

Either way, we'll remind you when they're ready :)

Get a free preview of these Notes, just enter your email below.

×
Unlock Preview

### Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

COURSE
PROF.
Staff
TYPE
Class Notes
PAGES
3
WORDS
KARMA
25 ?

## Popular in Economcs

This 3 page Class Notes was uploaded by Ms. Ari Lesch on Saturday September 26, 2015. The Class Notes belongs to ECON 101 at Iowa State University taught by Staff in Fall. Since its upload, it has received 13 views. For similar materials see /class/214443/econ-101-iowa-state-university in Economcs at Iowa State University.

×

## Reviews for PRIN MICROECONOMICS

×

×

### What is Karma?

#### You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 09/26/15
April 2 2001 Monopoly Handout 1 A firm is a monopoly if it is the only supplier of a product for which there is no close substitute A monopoly sets the price of its product without concern that the price might be undercut by rivals A monopoly faces a downward sloping demand curve The demand function for a monopolist is written as Q Dp where Q is the quantity demanded at the price p The inverse demand function is given by p D 391Q gQ where g denotes the inverse of the function D For example if Q 18 r pthenp 252 14Q Revenue for a monopolist The revenue of a firm R is given by pQ where p is the price of the product and Q is the level of output In market equilibrium the price depends on the amount consumed and produced The monopolists revenue is therefore R pQ gQQ If the inverse demand function is linear and given by p A BQ then revenue is given by RpQgQ A BQQ AQiBQZ For example if the inverse demand function is p 252 l4Q then revenue is given by R pQ gQQ 2527 14QQ 252g 7 HQ2 Marginal revenue is the increment or addition to revenue that results from producing one more unit of output Marginal revenue is the change in total revenue from producing one more unit of output In discrete or average terms marginal revenue is given by change in output AQ where A denotes change R and TR both denote revenue and Q denotes output For a linear inverse demand function it is easy to compute marginal revenue If the inverse demand function is given by p A Bchen marginal revenue is given by MR A ZB Q So marginal revenue has the same intercept and a slope twice as steep as inverse demand One way to draw this is to find the intercept on the Q axis for the demand function and then use 2 of that value as the Q intercept for the marginal revenue function Once the firm has determined the least costly way to produce each output level it chooses the level of output which maximizes profits Specifically it has the following maximization problem max pQ 7 CQ w A max gQQ A CQ w max 252 r 14QQ r CQ w Q a max 252g 714Q2 r CQ w Q FC VC C AFC AVC ATC MC A MC Demand TR MR A MR Pn39ce 100 0 100 252 0 252 120 238 100 120 220 10000 12000 22000 109 238 238 224 100 210 100 220 320 5000 11000 16000 92 224 448 196 86 182 100 306 406 3333 10200 13533 81 210 630 168 78 154 100 384 484 2500 9600 12100 76 196 784 140 76 126 100 460 560 2000 9200 11200 77 182 910 112 80 98 100 540 640 1667 9000 10667 84 168 1008 84 90 70 100 630 730 1429 9000 10429 97 154 1078 56 106 42 100 736 836 1250 9200 10450 116 140 1120 28 128 14 100 864 964 1111 9600 10711 141 126 1134 0 156 14 100 1020 1120 1000 10200 11200 172 112 1120 28 190 42 100 1210 1310 909 11000 11909 209 98 1078 56 230 70 100 1440 1540 833 12000 12833 252 84 1008 84 Cost Curves Nhrginal Revenue 400 and Optimal Pnce Demand 350 MR 300 0 VC 200 P qot 150 Q qot 100 5Q O 000 200 400 600 800 1000 1200 1400 1600 1800 Pro t 100 128 224 300 350 368 348 284 170 232 532 Now let inverse demand be given by p 165 14Q Q FC VC C AFC AVC ATC MC A MC Demand TR MR A MR Pro t Pn39ce 0 100 0 100 165 0 165 100 120 151 1 100 120 220 10000 12000 22000 109 151 151 137 69 100 123 2 100 220 320 5000 11000 16000 92 137 274 109 46 86 95 3 100 306 406 3333 10200 13533 81 123 369 81 37 78 67 4 100 384 484 2500 9600 12100 76 109 436 53 48 76 39 5 100 460 560 2000 9200 11200 77 95 475 25 85 80 11 6 100 540 640 1667 9000 10667 84 81 486 3 154 90 17 7 100 630 730 1429 9000 10429 97 67 469 31 261 106 45 8 100 736 836 1250 9200 10450 116 53 424 59 412 128 73 9 100 864 964 1111 9600 10711 141 39 351 87 613 156 101 10 100 1020 1120 1000 10200 11200 172 25 250 115 870 190 129 11 100 1210 1310 909 11000 11909 209 11 121 143 1189 Cost Curves Marginal Revenue and Loss Demand 300 25o 200 39 eATC 150 Q Opt P Opt 100 39ATC Opt AVC 5O ATC Opt I I I I I I I I I l I 1 I l r I I I O 2 4 6 8 1O 12 14 16 18 Output

×

×

×

### You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

## Why people love StudySoup

Bentley McCaw University of Florida

#### "I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"

Anthony Lee UC Santa Barbara

#### "I bought an awesome study guide, which helped me get an A in my Math 34B class this quarter!"

Steve Martinelli UC Los Angeles

Forbes

#### "Their 'Elite Notetakers' are making over \$1,200/month in sales by creating high quality content that helps their classmates in a time of need."

Become an Elite Notetaker and start selling your notes online!
×

### Refund Policy

#### STUDYSOUP CANCELLATION POLICY

All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email support@studysoup.com

#### STUDYSOUP REFUND POLICY

StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here: support@studysoup.com

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to support@studysoup.com

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.