ADMS 2320 Midterm: ADMS2320F07Midterm.pdf
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12 Apr 2015
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The owner of optometry practice in a city with more than a hundred other practices has the following demand and cost schedules for eye exams:
Price Per Eye Exam |
Eye Exams Per Week |
Total Cost Per Week |
Total Revenue Per Week |
Marginal Revenue (MR) |
Marginal Cost (MC) |
$100 | 100 | $10,500 | |||
$ 80 | 140 | $10,800 | |||
$ 60 | 200 | $11,300 | |||
$ 40 | 310 | $12,290 | |||
$ 20 | 550 | $14,762 |
a. Fill in total revenue, MR, and MC.
b. What would cause a monopolistic competitive optometrist to face a downward sloping demand curve?
c. Using the data you filled in for MR and MC, what would be the profit-maximizing price and number of eye exams for this optometrist?