This program sets up markets in which each person is a monopoly seller
who chooses a production quantity, facing a linear demand and constant marginal cost.
Demand is subject to random shocks, which adds realism. Students, however,
will discover the approximate optimal output by
trial and error. In a followup exercise, students can plot price-quantity points and sketch demand in
a graph, and then relate their optimal quantity choice to notions of marginal revenue and marginal cost.
 | | | | | | Key Concepts:
Total Revenue
Marginal Revenue
Demand Elasticity
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Copyright 2009, Charles Holt, Please report problems and suggestions:
veconlab@gmail.com
Vecon Lab - November 24, 2009 |