Consider a profit-maximizing firm which is the only seller in a particular market. The firm's marketing research department has estimated the demand and marginal revenue for your firm's product, and these are described by the following equations: P = 100 -0.01Q and MR = 100 -0.02Q. Consider that the firm's cost structure is described by the following equations: MC = 40 +0.02Q and AVC = 40 +0.01Q. Furthermore, the firm's only fixed cost is the $24,000 lease payment it has for the fully furnished building it rents. (Question 5 of 5) Consider that a shock to the economy led to a decrease in the firm's variable cost (marginal cost and average variable cost are now lower at each level of output). As a result, the firm's new cost structure is defined by the equations: MC = 20+ 0.02Q and AVC = 20+ 0.01Q. The firm fully adjusts after the shock. What impact did the economic shock have in this market? As a result of the economic shock, the quantity traded is on consumers. Consumers face a market price that is the initial quantity traded, and the firm's profit is its initial profit. Additionally, the economic shock had the initial consumer surplus. the initial market price, and have a consumer surplus that is

Consider a profit-maximizing firm which is the only seller in a particular market. The firm's marketing research department has estimated the demand and marginal revenue for your firm's product, and these are described by the following equations: P = 100 -0.01Q and MR = 100 -0.02Q. Consider that the firm's cost structure is described by the following equations: MC = 40 +0.02Q and AVC = 40 +0.01Q. Furthermore, the firm's only fixed cost is the $24,000 lease payment it has for the fully furnished building it rents. (Question 5 of 5) Consider that a shock to the economy led to a decrease in the firm's variable cost (marginal cost and average variable cost are now lower at each level of output). As a result, the firm's new cost structure is defined by the equations: MC = 20+ 0.02Q and AVC = 20+ 0.01Q. The firm fully adjusts after the shock. What impact did the economic shock have in this market? As a result of the economic shock, the quantity traded is on consumers. Consumers face a market price that is the initial quantity traded, and the firm's profit is its initial profit. Additionally, the economic shock had the initial consumer surplus. the initial market price, and have a consumer surplus that is

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Economics

Consider a profit-maximizing firm which is the only seller in a particular market. The firm's marketing research department has estimated the demand and marginal revenue for your firm's product, and these are
described by the following equations: P = 100 -0.01Q and MR = 100 -0.02Q. Consider that the firm's cost structure is described by the following equations: MC = 40 + 0.02Q and AVC = 40 + 0.01 Q. Furthermore,
the firm's only fixed cost is the $24,000 lease payment it has for the fully furnished building it rents.
(Question 5 of 5)
Consider that a shock to the economy led to a decrease in the firm's variable cost (marginal cost and average variable cost are now lower at each level of output). As a result, the firm's new cost structure is defined
by the equations: MC = 20 + 0.02Q and AVC = 20 + 0.01 Q. The firm fully adjusts after the shock.
What impact did the economic shock have in this market?
As a result of the economic shock, the quantity traded is
✓on consumers. Consumers face a market price that is
the initial quantity traded, and the firm's profit is
✓its initial profit. Additionally, the economic shock had
the initial consumer surplus.
the initial market price, and have a consumer surplus that is

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