管理经济学习题.docx

管理经济学习题.docx

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ManagerialEconomics:

Seminar1Exercises

1. TheShandcompanyproducesblankCD’s.ThemarginalcostofeachCDis£20.Sincetherearemanysubstitutesforthefirm’sCD’s,thepriceelasticityofdemandforCD’sis2.

（a）Thechairmanofthecompanybelievesthatcost-pluspricingisappropriateforthefirmHemarks-upmarginalcostsby100percenttoobtainprice.CalculatethepriceatwhichthefirmsellsitsCD’sandcommentonwhetherthechairmaniscorrect.

（b）BecauseofgrowingcompetitionintheCDmarket,thepriceelasticityofdemandforthefirm’sCD’sincreasesto3.Thechairmancontinuestousethesamecost-pluspricingstrategy.CalculatethenewpriceatwhichtheCD’saresoldandcommentonwhetherthechairmaniscorrect.

2.AmonopolyfirmhasademandfunctionQ=80-4P,andanaveragecost（AC）functionofAC=40Q-1+6,wherePispriceandQisquantity.

（a）derivetheexpressionforthedemandcurvefromthedemandfunction

（b）showthatthemarginalrevenuecurveisdownwardslopingfromlefttoright

（c）calculatethelevelofoutput,price,andprofits,attheprofitmaximizinglevelofoutput,andcommentonyourresults.

（d）calculatethepriceelasticityofdemandattheprofitmaximizingpointonthedemandcurve,andcommentonyourresults

3. Whywillamonopolist’sprofitmaximisingrateofoutputwillalwaysbeintheregionof（price）elasticdemand?

4. Explainwhyafirminmonopolisticcompetitioncanonlyproduceatthelowestpointofitslong-runaveragecostcurveintheshortrun.

REVISIONQUESTION

WhatproblemsariseforindustryregulatorsiftheSCPmodelworksinreverse?

ManagerialEconomics:

Seminar2Exercises

1.AandBareduopolists.Thepayoffstobothfirmsfromdefaultingonanagreementare80:

80;thebenefitstobothfirmsfromcolludingtoupholdanagreementare:

100:

100.IfAdefaultsontheagreementandBupholdstheagreement,thepay-offsare150:

20,respectively,whilethereverseholdsifBdefaultsontheagreementandAupholdsit.

（a）Showthesepayoffsinmatrixform

（b）Ifthegameisa‘one-shot’game,whatistheNashequilibriumoutcome?

（c）Explainwhyyouranswerto（b）isnotaParetoefficientoutcome.

2.Suppose,now,thattheabovegameisplayedindefinitely:

（a）Explainwhythethreatofpunishmentiscredible?

（b）ExplainwhytheNashequilibriumisthesameasinQ1（b）above

3.Supposethegameaboveisnowplayedinfinitely:

（a）WhatisrequiredforAtobedeterredbythethreatofpunishmentbyB?

（b）ExplainwhyAwillonlydefaultifitsdiscountrateisgreaterthan0.4（or40%）?

Hint:

thinkofthecalculationrequiredfordiscountinganinfinitestreamofpayments/

REVISIONQUESTION

1. Acompanybelievesthatthedemandcurveforitsproductis:

andthatitstotalcostfunctionis:

WhereQ=output;TCistotalcost,andPisprice.

（a） Explainwhythedemandcurvehasthisshape.

（b） Isthemarginalrevenuecurvecontinuous?

（c） Whatisthefirmscurrentpriceandoutput?

（d） Whatpriceandoutputwillmaximisethefirm’sprofit?

Explain.

ManagerialEconomics:

Seminar3

1.Supposecanindustryiscomposedoftwofirms.Supposethedemandcurveforcansis:

P=100–Q

WherePisthepriceofacan（inpence）andQisthequantitydemandedofcans（inmillionspermonth）.Supposethatthetotalcostfunctionofeachfirmis:

TC=2+15q

WhereTCistotalcostpermonth（intensofthousandsof£）andqisthequantityproduced（inmillionspermonth）,bythefirm

（a）Whataretheprofitmaximisingpriceandoutputifthefirmssetprice=marginalcost?

（b）Whataretheprofitmaximisingpriceandoutputifthefirmscolludeandactlikeamonopolist?

（c）Dothefirmsmakeahighercombinedprofitiftheycolludethantheywouldiftheysetprice=marginalcost?

Ifso,howmuchhigheristheircombinedprofit?

2.Whyshouldoligopolistseverfindcollusionrationalgiventhefundamentalweaknessesofcartels?

REVISIONQUESTION

3.Afirmmakingelectronicgamesforecaststhatitsrequiredturnovernextyearwillbeasalesfigureof£5million.Itestimatesthatpriceandadvertisingelasticitiesrespectively,willbe0.9and0.08.Atwhatlevelwillitsetitsadvertisingbudgetforthecomingyear?