Question

1. Suppose you are the only producer in the market (you are a monopolist) and want to maximize your profit. Do you prefer to be able to impose Perfect Price Discrimination or Bundling? Why? (you can only choose one pricing strategy)

2. As a firm in a competitive market, how do you find the quantity that maximizes your profit? (you know your marginal costs and market price)

3. Suppose that there is a firm with increasing marginal cost in a competitive market. Right now, the firm produces 100 goods. So, the quantity of production is 100 now. The marginal cost of producing the 100th good is $ 25. The market price is $ 30.

What is your suggestion for this firm to maximize its profit (choose one):

1) keep the production level at 100.

2) Produce more goods.

3) Produce fewer goods.

explain please!!!

Answer 1