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Question: select the best answer for each question 16 london park...

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Select the BEST ANSWER for each question 16. London Park land is the only golf course around the town. The marginal cost of providing a round of golf game is MC- $20. The demand function for golf games is Q-50-0.5P. You are hired to come up with the profit maximizing combination of the membership fee (F, lump-sum subscription fee), and the green fee (P, per unit usage fee). Which of the following would be the optimal membership fee, F? a) F-800 b) F=1600 c) F-3200 e) None of the above (Warning: DIFFICULT! Do not spend so much time on this question at the beginning of the exam) JL Pharmaceutical, Inc. has a patent on a particular medication. The medication sells for $1 per daily dose and marginal cost is estimated to be a constant at $0.2 (20 cents). Assuming linear demand, use this information to estimate the deadweight loss from monopoly pricing if the firm currently sells 1000 doses per day a) 400 b) 800 c) 1000 d) 1200 e) 0 17. 18 A monopolist faces inverse demand curve P- 100-2Q. The monopolists marginal cost is MC- $20. What is the price elasticity of demand at the profit maximizing price of the monopolist? (a) -1.5 (b)-6 (d) +6 (e)-2/3
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