Recon (version 0.1.0.0)

monopoly_solver: Monopoly Profit Maximization

Description

This function numerically finds the profit-maximizing output for a monopolist with linear and non-linear cost and demand curves. For guaranteed existence of feasible solution (in which both price and output are positive), a linear demand curve might be necessary.

Usage

monopoly_solver(c0 = 0, c1 = 1, c2 = 0, p0 = 0, p1 = -1,
  p2 = 0, q0 = 0)

Arguments

c0

intercept of monopolist's cost function. Defaults to 0.

c1

linear term's parameter of monopolist's cost function. Defaults to 1.

c2

quadratic terms's parameter of the monopolist's cost function. Defaults to 0.

p0

intercept of inverse demand function. Defaults to 0.

p1

linear term's parameter of inverse demand function. Defaults to -1. Note that it is important to specify it as a negative number, or the demand curve will be upward sloping.

p2

quadratic terms's parameter of the demand curve. Defaults to 0.

q0

Initial guess for monopolist's output. Defaults to 0. Strongly advise not to set this parameter unless you are very aware of what you're doing.

Value

A list with market price, output, profits, markup, profitrate.

Examples

# NOT RUN {
monopoly_solver(c0 = 20, p0 = 50 )

# }