2000-2500 miles 1200-2000 miles 900-1200 miles 700-900 miles 600-700 miles 500-600 miles

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# 2000-2500 miles 1200-2000 miles 900-1200 miles 700-900 miles 600-700 miles 500-600 miles

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## 2000-2500 miles 1200-2000 miles 900-1200 miles 700-900 miles 600-700 miles 500-600 miles

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1. I think the distance (as the crow flies) from Paris, France to Vienna, Austria is in the range of: • 2000-2500 miles • 1200-2000 miles • 900-1200 miles • 700-900 miles • 600-700 miles • 500-600 miles • 400-500 miles • 300-400 miles • 200-300 miles

2. The distance (as the crow flies) from Paris, France to Vienna, Austria is in the range of: • 2000-2500 miles • 1200-2000 miles • 900-1200 miles • 700-900 miles • 600-700 miles • 500-600 miles • 400-500 miles • 300-400 miles • 200-300 miles

3. The distance (as the crow flies) from Paris, France to Vienna, Austria is in the range of: • 2000-2500 miles • 1200-2000 miles • 900-1200 miles • 700-900 miles • 600-700 miles • 500-600 miles • 400-500 miles • 300-400 miles • 200-300 miles

4. What is it exactly? 642 miles

5. Based on Weds. Survey, what price should Apple set to maximize its total revenue from sales of IPODs to this class? • \$400 • \$350 • \$300 • \$250 • \$200 • \$150

6. If you haven’t done so, go to the class website. Find this assignment. Get the data from our survey and answer the questions that are posed there. We will ask these questions as clicker questions in class on Monday.

7. A monopolist is currently selling 50 units at \$100 each. In order to sell one more unit, he would have to cut the price to \$99. What is his marginal revenue? • \$100 • \$99 • \$75 • \$49 • \$29 • \$0

8. Why is that? • To sell one more unit he needs to cut price by \$1. He gets \$99 for the extra unit he sells, but he loses \$1 on each of the 50 units he was selling at \$100. So his marginal revenue is \$99-50=\$49.

9. If demand for a monopolist’s product is inelastic at the current price, he could increase his profits by reducing output, even if his marginal cost is very small. • True • False

10. Why is that? • If demand is inelastic, then a small price increase and the resulting quantity decrease must increase revenue. So by cutting back quantity he increases revenue. Reducing quantity certainly won’t increase his costs, so his profit must increase.

11. The demand curve has the equation P=100-2Q. At what quantity is marginal revenue equal to zero? • Q=80 • Q=60 • Q=50 • Q=40 • Q=25

12. With linear demand, MR is a straight line with same intercept, twice as steep as demand.MR=100-4Q 100 Green Line Demand Curve 100-2Q Pink Line MR curve, 100-4Q 25 50