Apple is the sole producer of the iPod. Apples constant marginal cost of producing the iPod...
Apple is the sole producer of the iPod. Apples constant marginal cost of producing the iPod is $200. its fixed cost is $736 million and its inverse demand function is P = 600 - 25Q, where Q units are measured in millions.
a. what is apples average cost function?
b. assuming that apple is maximsing short-run monopoly profit, what is its marginal revenue function?
c. what are its profit maximising price and quantity, proft and lerner index?
d. what is the elasticity of demand at the profit maximising level?
e. show apples profit maximising solution in a figure?
Homework Answers
A) TC = FC + MC* Q
AC = TC/ Q
= FC/Q + MC
= 736/Q + 200
AC = 736/Q + 200
b) MR = 600-50Q
c) at eqm, MR = MC
600-50Q = 200
400 = 50Q
Q* = 8
P*= 600-25*8
= 600-200
P* = 400
lerner index = (P-MC)/P
= (400-200)/400
= .5
d) elasticity of demand = (P/Q)*dQ/dP
= 400/8*25
= 400/200
= 2
e)
Add Answer to:
Apple is the sole producer of the iPod. Apples constant marginal
cost of producing the iPod...
2.5 In 2015, Apple introduced the Apple Watch. According to HIS, the cost of producing the...
2.5 In 2015, Apple introduced the Apple Watch. According to HIS, the cost of producing the 38mm Apple Watch Sport was $84. The price was $349. What was Apple’s price/marginal cost ratio? What was its Lerner Index? If Apple is a short-run profit-maximizing monopoly, what elasticity of demand did Apple believe it faced?
When the iPad was introduced, Apple's constant marginal cost of producing this iPad was about $220...
When the iPad was introduced, Apple's constant marginal cost of producing this iPad was about $220 We estimate that Apple's inverse demand function for the iPad was p 770-11Q where Q was the millions of iPads purchased. In turn, Apple's profit.maximizing quantity was Q 25 million iPads and its profit-maximizing price was p $500 per unit What was the Lerner Index for the iPad? If Apple were profit maximizing, what price elasticity of demand did it face? Enter your response...
When the iPod was first introduced by Apple, it was a product so different to other...
When the iPod was first introduced by Apple, it was a product so different to other portable music players that it was seen as being in its own market (ie: having features of a monopoly). Assume Apple sold the number of iPods to maximise profit. Which of the following statements are true: Assuming demand was linear, the demand curve for iPods was twice as steep as the marginal revenue curve. average total cost. The iPod's average total cost of production...
Exercise 4. In 2015, Apple introduced the Apple Watch. According to HIS, the cost of producing...
Exercise 4. In 2015, Apple introduced the Apple Watch. According to HIS, the cost of producing the 38mm Apple Watch Sport was $84. The price was $349. a. What was Apple's price/marginal cost ratio? b. What was its Learner Index? c. If Apple is a short-run profit-maximizing monopoly, what elasticity of demand did Apple believe it faced?
When the iPod was first introduced by Apple, it was a product so different to other...
When the iPod was first introduced by Apple, it was a product so different to other portable music players that it was seen as being in its own market (ie: having features of a monopoly). Assume Apple sold the number of iPods to maximise profit. Which of the following statements are true: ם The quantity of iPods sold in the market would be larger if the market was perfectly competitive The price charged for an iPod when first introduced would...
7. Gilead, Johnson and Johnson, Moderna, amongst other are rushing to develop a vaccine for COVID-...
7. Gilead, Johnson and Johnson, Moderna, amongst other are rushing to develop a vaccine for COVID- 19. The organization to develop the vaccine will essentially have a monopoly due to patent rights and other barriers to entry such as costs, production, and expertise. Suppose Gilead develops a vaccine, their marginal cost of producing this vaccine is about $160 each dose, fixed costs such as R&D and production centers are $856 million, and the estimated inverse demand function was p= 1000...
(e) (8 points) Calculate the Lerner Index at the profit maximizing price and quantity. (f) (16...
(e) (8 points) Calculate the Lerner Index at the profit maximizing price and quantity. (f) (16 points) What is the price elasticity at the profit maximizing price and quantity? Is it elastic, unit elastic, or inelastic? 7. Gilead, Johnson and Johnson, Moderna, amongst other are rushing to develop a vaccine for COVID- 19. The organization to develop the vaccine will essentially have a monopoly due to patent rights and other barriers to entry such as costs, production, and expertise. Suppose...
Suppose that a monopolist faces a constant marginal cost of 6 and a constant (firm) elasticity...
Suppose that a monopolist faces a constant marginal cost of 6 and a constant (firm) elasticity of demand of -2. Using the Lerner Index, what is the monopoly price and what is the mark-up (difference between price and marginal cost)?
(2.5jln 2015, Apple introduced the Apple Watch. According to HIS, the cost of produc- ing the...
(2.5jln 2015, Apple introduced the Apple Watch. According to HIS, the cost of produc- ing the 38mm Apple Watch Sport was $84. The price was $349. What was Apple's price/marginal cost ratio? What was its Lern- er Index? If Apple is a short-run profit-maxi- mizing monopoly, what elasticity of demand did Apple believe it faced? C
If a monopoly charges $2.00 and its marginal cost of producing the good is $1.50, what...
If a monopoly charges $2.00 and its marginal cost of producing the good is $1.50, what explanation can be given about the elasticity of demand for the product? If a monopoly in another firm charges $2.00 and the marginal cost of producing the good is $1.00, what explanation can be given about the elasticity of demand for the product? What conclusion can be given about the mark-up of price over marginal cost and the elasticity of demand for the product?
When the iPad was introduced, Apple's constant marginal cost of producing this iPad was about $220 We estimate that Apple's inverse demand function for the iPad was p 770-11Q where Q was the millions of iPads purchased. In turn, Apple's profit.maximizing quantity was Q 25 million iPads and its profit-maximizing price was p $500 per unit What was the Lerner Index for the iPad? If Apple were profit maximizing, what price elasticity of demand did it face? Enter your response...
When the iPod was first introduced by Apple, it was a product so different to other portable music players that it was seen as being in its own market (ie: having features of a monopoly). Assume Apple sold the number of iPods to maximise profit. Which of the following statements are true: Assuming demand was linear, the demand curve for iPods was twice as steep as the marginal revenue curve. average total cost. The iPod's average total cost of production...
Exercise 4. In 2015, Apple introduced the Apple Watch. According to HIS, the cost of producing the 38mm Apple Watch Sport was $84. The price was $349. a. What was Apple's price/marginal cost ratio? b. What was its Learner Index? c. If Apple is a short-run profit-maximizing monopoly, what elasticity of demand did Apple believe it faced?
When the iPod was first introduced by Apple, it was a product so different to other portable music players that it was seen as being in its own market (ie: having features of a monopoly). Assume Apple sold the number of iPods to maximise profit. Which of the following statements are true: ם The quantity of iPods sold in the market would be larger if the market was perfectly competitive The price charged for an iPod when first introduced would...
7. Gilead, Johnson and Johnson, Moderna, amongst other are rushing to develop a vaccine for COVID- 19. The organization to develop the vaccine will essentially have a monopoly due to patent rights and other barriers to entry such as costs, production, and expertise. Suppose Gilead develops a vaccine, their marginal cost of producing this vaccine is about $160 each dose, fixed costs such as R&D and production centers are $856 million, and the estimated inverse demand function was p= 1000...
(e) (8 points) Calculate the Lerner Index at the profit maximizing price and quantity. (f) (16 points) What is the price elasticity at the profit maximizing price and quantity? Is it elastic, unit elastic, or inelastic? 7. Gilead, Johnson and Johnson, Moderna, amongst other are rushing to develop a vaccine for COVID- 19. The organization to develop the vaccine will essentially have a monopoly due to patent rights and other barriers to entry such as costs, production, and expertise. Suppose...
(2.5jln 2015, Apple introduced the Apple Watch. According to HIS, the cost of produc- ing the 38mm Apple Watch Sport was $84. The price was $349. What was Apple's price/marginal cost ratio? What was its Lern- er Index? If Apple is a short-run profit-maxi- mizing monopoly, what elasticity of demand did Apple believe it faced? C
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 11 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 11 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 11 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 11 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 11 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 11 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 11 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 11 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 11 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 11 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 11 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 11 months ago