Inverse Demand Curves Assignment | Homework For You
A monopoly produces a good with a network externality at a constant marginal and average cost of $3 In the first periods
p=11-10
In the second period, its inverse demand curveis
p=11-10
unless it sells at least 8 units in the first period. If it meets or exceeds this target, then the demand curve rotates out by any given price), so that its inverse demand curve is sells a times as many units for
p=11- 0
The monopoly knows that it can sell no output after the second period The monopoly’s objective is to maximize the sum of its profits over the two periods For what values of a would the monopoly earn a higher two-period profit by setting a lower price in the first period? Ifais fround your answer to two decimal places) less than greater than equal to. Get Economics homework help today
