8. Consider the following demand schedule. Does it apply to a perfectly competitive firm? Compute marginal and Average Revenue Bb Upload Assi XI VitalSourceC Solved: Cons x= Kareem Dav xMy Class Sc XMy Question ×+A bookshelf.vitalsource.com/#/books/9781305464841/cfi/592!/4/4@0.00:0.683Chapter 25 Monopoly559Table of Contents3. Why is it necessary for the seller to be able to keepcustomers from reselling the product in order for pricediscrimination to occur? There are many products forwhich you get a discount for purchasing large quanti-ties. For instance, most liquor stores will provide a dis-count on wine if you purchase a case. Is this pricediscrimination? If so, what is to keep one customerfrom purchasing cases of wine and then reselling singlebottles at a price above the case price but below theliquor store's single-bottle price?4. Many people have claimed that there is no good forwhich substitutes are not available. If so, does this meanthere is no such thing as monopoly?5. Suppose that at a price of $6 per unit, quantitydemanded is 12 units. Calculate the quantity demandedwhen the marginal revenue is $6 per unit. (Hint: Theprice elasticity of demand is unity at the midpoint ofthe demand curve.)6. In the following figure, if the monopoly firm facesATC1, which rectangle measures total profit? If themononoly firm faces A TC. what ie total nroft? Whatillegal. What conditions are necessary for this pricingscheme to be profitable to the U.S. companies?8. Consider the following demand schedule. Does it applyto a perfectly competitive firm? Compute marginal andaverage revenue.PriceQuantityPriceQuantity$95$55$883$406$804$2279. Suppose the marginal cost of producing the good inquestion 8 is a constant $10 per unit of output. Whatquantity of output will the firm produce?10. Do you agree or disagree with this statement:“A monopoly firm will charge an exorbitant price forits product"? Explain your answer.11. Do you agree or disagree with this statement:“A monopoly fthan a perfect12. State colleges aWe've updated our read aloud feature!Give it a try here.1口。6 Aa26559

A perfectly competitive firm will always sell their goods and services at a fixed price decided by…

Answered: 8. Consider the following demand…

8. Consider the following demand schedule. Does it apply to a perfectly competitive firm? Compute marginal and average revenue. Price Quantity Price Quantity $95 2 $55 $88 3 $40 $80 4 $22 7

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Now consider any perfectly competitive market and suppose there are 'n' firms in the market in the long-run initially, but then the product becomes super-trendy and demand doubles. How many (new) firms enter the market? Whydon’t you need to know the cost and demand curves?
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6. Deriving the short-run supply curve The following graph plots the marginal cost (MC) curve, average total cost (ATC) curve, and average variable cost (AVC) curve for a firm operating in the competitive market for sun lamps. 100 90 80 70 60 50 ATC 40 30 20 10 0 0 5 AVC MOD 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of lamps) For every price level given in the following table, use the graph to determine the profit-maximizing quantity of lamps for the firm. Further, select whether the firm will choose to produce, shut down, or be indifferent between the two in the short run. (Assume that when price exactly equals average variable cost, the firm is indifferent between producing zero lamps and the profit-maximizing quantity of lamps.) Lastly, determine whether the firm will earn a profit, incur a loss, or break even at each price. Price (Dollars per lamp) 10 20 32 40 50 60 Quantity (Lamps) Produce or Shut Down? Profit or Loss? On the following graph, use the orange points (square…
2. The demand curve facing a competitive firm The following graph illustrates the market for small moving trucks in Waco, TX, during Baylor's fall move-in week. PRICE (Dollars per small truck) 100 90 80 70 60 50 8 40 30 20 10 0 0 0 Demand 1 1 2 3 2 3 5 6 7 QUANTITY (Hundreds of small trucks) Suppose that You Yeet is one of over a dozen competitive firms in the Waco area that offers moving truck rentals. Based on the preceding graph showing the weekly market demand and supply curves, the price YouYeet must take as given is $ Fill in the price and the total, marginal, and average revenue YouYeet earns when it rents 0, 1, 2, or 3 trucks during move-in week. Quantity Price Total Revenue Marginal Revenue Average Revenue (Dollars) (Dollars) (Dollars per truck) (Trucks) (Dollars per truck) Supply curve Supply 9 Average revenue curve Marginal cost curve 10 0 Marginal revenue curve The demand curve faced by YouYeet is identical to which of its other curves? Check all that apply.
Suppose a $2 tax imposed on consumers causes the demand curve to shift down to D₂. At the new equilibrium price (shown by the intersection of D₂ and Supply), each firm would earn profit in the long run. If this is a constant-cost industry, firms will the industry when moving from the short run to the long run until the equilibrium market price is per cat toy. True or False: Because this is a constant-cost industry, the incidence of this tax falls equally on consumers and producers in the long run. O True False
3. Profit maximization using total cost and total revenue curves Suppose Yakov runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a competitive market, and the market price is $25 per teddy bear. The following graph shows Yakov's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for teddy bears quantities zero through seven (inclusive) that Yakov produces. Yakov's profit is maximized when he produces teddy bears. When he does this, the marginal cost of the last teddy bear he produces is , which is ___ than the price Yakov receives for each teddy bear he sells. The marginal cost of producing an additional teddy bear (that is, one more teddy bear than would maximize his profit) is , which is than the price Yakov receives for each teddy bear he sells. Therefore, Yakov's profit-maximizing quantity corresponds to the intersection of the…
Regulators in the European Union have charged Microsoft with illegally tying Internet Explorer (IE) to Windows and mandated that a version of Windows be offered stripped of IE. A news report suggested that when Microsoft launches Windows 7, it will charge a higher price for the IE-stripped version than the price for a full version that includes IE. Microsoft denied this report but announced that it would offer the full version of Windows 7 at a lower upgrade price. Source: computerworld.com
7. Working with Numbers and Graphs Q8 The following graph illustrates the demand and marginal revenue curve (D-MR) of a perfectly competitive firm. Suppose that when the firm produces 70 units, its average variable cost equals $30 per unit and its average total cost equals $55 per unit. Use the green rectangle (triangle symbols) to plot the total cost of producing 70 units. Next, use the grey rectangle (star symbols) to plot the total variable cost of producing 70 units. Then, use the tan rectangle (dash symbols) to plot the total revenue at 70 units. Finally, use the purple rectangle (diamond symbols) to plot the profit or loss at 70 units. PRICE AND COST (Dollars) 100 90 80 70 60 50 40 30 20 10 0 0 10 30 40 50 60 QUANTITY (Units) + ATC +AVC 70 80 D=MR 90 100 Total Cost Total Variable Cost Total Revenue Profit or Loss ? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for…
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3. Explain where a perfectly competitive firm's marginal revenue curve is located relative to price and demand. 4. What is the optimal output rule for profit maximization? Draw a graph to show the output level where a perfectly competitive firm maximizes profit.
2. Since a firm in a perfectly competitive market is a price taker, the demand for this firm's product is essentially a horizontal line. True False
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