Assume Country X has an electricity market with supply and demand being given below: Qo--Po + 200 Os =-3P, + 300 Part 8- vertically integrated market the government decides to reform the electricity market so that there are a number of power plant using an auction system. A sample of the bids is given by the table below: Electricity Producers Electricity Distribution Asking price / KWh quantity/KWh Asking price/ KWh quantity/KWh 25 20 35 30 60 0.74 0.56 0.32 0.34 0.55 0.46 25 0.53 25 0.64 25 0.64 30 0.43 40 By studying the bids, 9. Find the range of the equilibrium market price 10. Find the equilibrium market quantity 11. Find the total welfare

Assume Country X has an electricity market with supply and demand being given below: Qo--Po + 200 Os =-3P, + 300 Part 8- vertically integrated market the government decides to reform the electricity market so that there are a number of power plant using an auction system. A sample of the bids is given by the table below: Electricity Producers Electricity Distribution Asking price / KWh quantity/KWh Asking price/ KWh quantity/KWh 25 20 35 30 60 0.74 0.56 0.32 0.34 0.55 0.46 25 0.53 25 0.64 25 0.64 30 0.43 40 By studying the bids, 9. Find the range of the equilibrium market price 10. Find the equilibrium market quantity 11. Find the total welfare

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A monopoly has the demand schedule p = 210 − 0.2q and the marginal cost schedule MC = 20 + 0.8q (a) If it can practise first-degree price discrimination how much should it sell? (b) If it can practise second-degree price discrimination and it has already made the decision to sell the first 100 units at a price of £190, what price should it charge for the rest of the units it sells?
Pre-mixed concrete is an important input for the construction industry. Concrete cannot be stored or transported over long distances as it begins to set after only a few hours. For this reason, only the three local firms—Aggregate Inc., Big Industries and ConCorp—are in a position to compete in the market. Moreover, the capital and regulatory requirements for constructing a new concrete plant are substantial, creating an effective barrier to entry. Pre-mixed concrete is regarded as a homogeneous good by the construction industry. Inverse demand in the market has been estimated to be,P = 670 − Q/40,where P represents the price of a cubic metre of concrete in dollars, and Q is the total number of cubic metres of concrete supplied into the market on a given day. At present the three firms appear have identical production costs, with each firm facing fixed costs of $400,000 per day and a marginal cost of $190 per cubic metre. Big Industries and ConCorp estimate that the proposed merger…
Pre-mixed concrete is an important input for the construction industry. Concrete cannot be stored or transported over long distances as it begins to set after only a few hours. For this reason, only the three local firms—Aggregate Inc., Big Industries and ConCorp—are in a position to compete in the market. Moreover, the capital and regulatory requirements for constructing a new concrete plant are substantial, creating an effective barrier to entry. Pre-mixed concrete is regarded as a homogeneous good by the construction industry. Inverse demand in the market has been estimated to be,P = 670 − Q/40,where P represents the price of a cubic metre of concrete in dollars, and Q is the total number of cubic metres of concrete supplied into the market on a given day. At present the three firms appear have identical production costs, with each firm facing fixed costs of $400,000 per day and a marginal cost of $190 per cubic metre. Big Industries and ConCorp estimate that the proposed merger…
(a) A monopolist sells its product in two markets, Spain and France. Its cost function is given by C = 4Q, where Q denotes total output, so the marginal cost is constant and equal to 4. The Spanish demand is given by QS = 6 – 0.5PS and the French demand is given by QF = 16 - PF, where PS and PF denote the price in Spain and the price in France, respectively. (i) (11) Define third-degree price discrimination. Assuming that third-degree price discrimination between the two markets is possible, calculate the price the monopolist will set in Spain, the price it will set in France and the firm's total profit. A new regulation now requires the firm to charge the same price to all its customers irrespective of the country they live in. Discuss the effect of this on the consumer surplus of Spanish customers, the consumer surplus of French customers and the firm's profit as compared to the situation in part (i).
Pre-mixed concrete is an important input for the construction industry. Concrete cannot be stored or transported over long distances as it begins to set after only a few hours. For this reason, only the three local firms—Aggregate Inc., Big Industries and ConCorp—are in a position to compete in the market. Moreover, the capital and regulatory requirements for constructing a new concrete plant are substantial, creating an effective barrier to entry. Pre-mixed concrete is regarded as a homogeneous good by the construction industry. Inverse demand in the market has been estimated to be,P = 670 − Q/40,where P represents the price of a cubic metre of concrete in dollars, and Q is the total number of cubic metres of concrete supplied into the market on a given day. At present the three firms appear have identical production costs, with each firm facing fixed costs of $400,000 per day and a marginal cost of $190 per cubic metre. Big Industries and ConCorp estimate that the proposed merger…
Pre-mixed concrete is an important input for the construction industry. Concrete cannot be stored or transported over long distances as it begins to set after only a few hours. For this reason, only the three local firms—Aggregate Inc., Big Industries and ConCorp—are in a position to compete in the market. Moreover, the capital and regulatory requirements for constructing a new concrete plant are substantial, creating an effective barrier to entry. Pre-mixed concrete is regarded as a homogeneous good by the construction industry. Inverse demand in the market has been estimated to be,P = 670 − Q/40,where P represents the price of a cubic metre of concrete in dollars, and Q is the total number of cubic metres of concrete supplied into the market on a given day. At present the three firms appear have identical production costs, with each firm facing fixed costs of $400,000 per day and a marginal cost of $190 per cubic metre. Big Industries and ConCorp estimate that the proposed merger…
Problem 14 A monopolist has an inverse demand curve given by p(y) = 12-y and a cost curve given by c(y) = y. (b) What is the deadweight loss of monopoly? (c) Suppose the government decides to put a tax on this monopolist so that for each unit it sells it has to pay the government $2. What will be its output under this form of taxation? (d) What will be the extra deadweight loss due to the tax? (e) Suppose now that the government puts a lump sum tax of $10 on the profits of the monopolist. What will be its output?
M7
Firms within the country of Anviliania are currently emitting pollutants. These pollutants cause damages within Anviliania. However, the pollutants also cause damages to the properties and health of residents of countries that share borders with Anviliania. The Marginal Abatement Costs of the firms in Anviliania can be represented by the equation MAC(Anvil.) = 750 -2.3 e The Marginal Damage Costs to the residents of Anviliania are given by MDC (Anvil.) =- - 40 + 10 e The Marginal Damage Costs to all residents (including the residents of Anviliania) are MDC (Globe) = -20+ 12 e a. Draw a diagram representing this situation. b. Determine the magnitude of the local market failure and the global market failure. c. Suppose that the Anvilianian government has given production subsidies to the firms in Anviliania. As a result, the firms have increased production (and the number of firms have increased.). Consequently, the aggregate MAC is now MAC' (Anvil.) = 800 - 2.3 e. Determine the…
What are the examples of each of the following bus terminal in Chicago; a) terminal with end loops b) terminal with loop c) short term bus terminal d) long term bus
Problem 2: Presently, APlus Transport and Big Movers are the only suppliers of services that haul heavy construction equipment between jobs within the Midwest. No other suppliers have the equipment necessary to perform the service. The market inverse demand for these hauling services is given below. P = 4,030-4Q where P is price per trip and Q is total number of trips per year. For simplicity, also assume that neither firm has fixed costs. From company records, you are given the following variable cost function for each firm: a. C. TVC = 300 TVCB = 80QB b. Calculate the Cournot market equilibrium price-output solutions for each firm including their respective profits. d. Assume these two competitors operate as a two-firm Cournot duopoly. Find the reaction functions for each firm. Suppose Big Movers shuts down operations so that APlus now has a monopoly in this market. What is the price, quantity, and profits for APlus after this change? Summarize the results of your findings over the…