BN 6.3 (c) (d) Case: Firm A is the Owner of all the Good A Stores in City A. The Market Demand Curve for a Set of Good A is: P=300-Q The Marginal Revenue Curve associated with this Demand Curve is: MR=300-2Q The Firm faces Costs of: TC=150Q+0.5Q² MC=150+ Q The City A Council needs help to determine if they should regulate Firm A? Please Answer Questions 6.3(c) & 6.3(d) - Only. Thanks! c. One member of city council suggests regulation that allows Firm A to charge the average cost of Good A. Calculate the price and quantity of Good A sold under: Price (P) = Average Cost (AC) Regulation d. Is Firm A Better-Off or Worse-Off under P = AC Regulation?

BN 6.3 (c) (d) Case: Firm A is the Owner of all the Good A Stores in City A. The Market Demand Curve for a Set of Good A is: P=300-Q The Marginal Revenue Curve associated with this Demand Curve is: MR=300-2Q The Firm faces Costs of: TC=150Q+0.5Q² MC=150+ Q The City A Council needs help to determine if they should regulate Firm A? Please Answer Questions 6.3(c) & 6.3(d) - Only. Thanks! c. One member of city council suggests regulation that allows Firm A to charge the average cost of Good A. Calculate the price and quantity of Good A sold under: Price (P) = Average Cost (AC) Regulation d. Is Firm A Better-Off or Worse-Off under P = AC Regulation?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

2
The diagram below represents a monopoly market with one privately owned power generator. P 90 75 60 45 30 15 10 20 30 40 ATC 50 b1. Show the expected social losses from having a monopoly. Draw in any extra lines you need to show your solution. b2. If a law is passed requiring marginal cost pricing in the above market, what problem would there be for this privately owned power generator. Support your answer with a diagram.
1. The cost function for any potential firm in a manufacturing industry is C(y) = 2 + 8y + 2y? (if a firm exits the industry, then its cost is zero). The inverse market demand function is given by P(y) = 100 – 2y. (a) If there is only one firm in the industry (the firm is a monopolist), what is the optimal output and the markup of the firm in equilibrium?
Problem 3 Squeak eClean produces commercial sanitizer used to clean tanker trucks that haul liquid food products such as milk. This sanitizer a commodity like any other and at the wholesale level, there are many domestic and foreign producers that compete vigorously. Suppose you have the following estimated market demand and supply functions for the sanitizer. Qd=248.08 +2.2Y – 0.6Pc+ 1.2 Ps − 4P Qs = 10 +2P In these equations, Q measures output in gallons per month (in 1,000's), P is the price per gallon of the sanitizer, Y is annual average household income (in 1,000's), Pc is an index of commodity prices, and Ps is the average price per gallon of other types of sanitizer. After gathering the latest data, you find that average household income is $36,400, the current level of the commodity price index is 110.6, and the average price per gallon of other types of sanitizers is $48.50. a. Find the current equilibrium price and quantity in this market. b. Find the equilibrium price and…
Q)Suppose the inverse demand curve for rides in an amusement park is P=136.3-4.7Q, and the marginal cost for offering a ride is 0. Suppose the customers pay an entrance fee and can take as many rides as they want without paying extra money for each ride. What is the optimal entrance fee? Select one: a. 9288.85 b. 1976.35 c. 3952.70 d. 4644.42
A college has two types fo students: students from middle-income families who have an estimated price elasticity of demand equal to -1 1/2 and students from lower-income families who have an estimated price elasticity of demand equal to -2 1/2. The colleges marginal cost for providing one-year's academic credit is $4,500 regardless of which student is receiving the education. a. What annual tuition (price) should the college establish for students from middle-income families? b. What annual tuition(price) should the college establish for students from lower-income families?
need help on question 4-13
A market has a demand function given by theequation Qd = 180 - 2P, and a supply function isgiven by the equation Qs = -15 + P. The marketis government-regulated, with price support per unit and production quotas. (NOTE: A production quota restricts the quantity of the good that can be produced. Firms are not allowed to produce more than the quota)(a) If the price is $72 per unit, what production quota is needed to ensure no shortages or surpluses? (HINT: Sketch the supply and demand equations.)(b) Considering the price support and the quota, calculate(i) the consumer surplus,(in) the producer surplus,(In) deadweight loss,Due to good weather, there is an increase in the demand for the good. The new demand equationis Qd = 190 - 2P. The government is trying todecide between two options:• Maintain the number of quotas and let the market adjust, or• Maintain price support and increase the number of quotas.Crinnamathemarinenidanidan maintain Suppose the government decides to maintain the…
Please refer to the figure above. When MC is constant, the ATC is also constant. How much profit the monopolist will make?
Price 765432 17 16 15 14 13 12 11 10 8 7 6 5 327043 1 The accompanying graph depicts the demand and marginal revenue (MR) curves in a market | served by a monopolist. The monopolist faces a constant marginal cost of $4. MR Demand 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Quantity What quantity will the monopolist produce to maximize its profits? Question 14 options: 12 6 8
Rubidoux Adventures supplies professional guides for climbs up Mt. Rubidoux. The company has two guides, Rocky and Cliff. Because Mt. Rubidoux is a pretty easy climb, the company has only two customers, Ken and Lucy. The table below shows the guides' marginal costs for each climb as well as the customers' MWTP for guided climbs. Use this table to answer the questions that follow. Assume that only whole climbs are available. MCRocky (S/climb) Climbs MCClff MWTPKen MWTPLucy (S/climb) (S/climb) (S/climb) 1 4 1 24 22 2 6. 23 21 3 7 4. 21 18 4 11 7 19 16 13 9 17 11 16 12 14 8 7 19 14 11 6 21 16 9 3 What is Ken's reservation price? O a. 22 Ob. 23 OC 24 O d. 21
Our local township sits on top of a large natural gas reservoir. The benefit of extractingnatural gas and the cost are depicted in the figure. Characterize the competitive solution, assuming no regulation. Next, assume a regulator would like to maximize the surplus from the resource.What would the solution be? Depict the new solution, drawing a second figure.