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Homer's boat manufacturing has a monopoly

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Homer's boat manufacturing has a monopoly on boat sales in the region. Homer's marginal cost of the 8th boat produced is $1,200. He produces only eight boats and can sell all eight boats for $1,500. The elasticity of demand at this price is -2. Is Homer maximizing profits?

 

Paper#28044 | Written in 18-Jul-2015

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