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Question 5
Based on
Demand: P = 1,000 − 10Q
Total Revenue: TR = 1,000Q − 10Q2
Marginal Revenue: MR = 1,000 − 20Q
Marginal Cost: MC = 100 + 10Q
where Q indicates the number of copies sold and P is the price in Ectenian dollars.
a. Find the price and quantity that maximize the company’s profit.
b. Find the price and quantity that would maximize social welfare.
c. Calculate the
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- Assume the figure on the right shows the cost structure for a monopolistically competitive firm selling a particular brand of shoes. MC is the marginal cost curve and AC is the average cost curve. If this firm produces 2 thousand pairs of shoes, does it minimize average cost? How much more would they need to produce to reach minimum average cost? The firm needs to produce an additional thousand pairs of shoes to reach minimum average cost. (Enter your response as an integer.) SEED Price (dollars per pair) 80- 72- 64- 56- 48- 40- 32- 24- 16- 8- 0- 0 1 Quantity (in thousands) MC AG 10 Q 20If this graph represents the market for Sonoran hotdogs in Tucson , which statement is true? A The market is monopolistically competitive and at its long run equilibrium B The market is a monopoly and firms are earning positive profits C The market is an oligopoly and firms are earning positive profits D The market is perfectly competitive and firms are suffering losses E The market is monopolistically competitive and not at its long run equilibriumConsider the long-run equilibrium in a monopolistically competitive market. Which of the following alternatives is correct? (a) Price is equal to marginal cost (b) The equilibrium is cost-efficient: Firms produce at the minimum of the average cost curve (c) The equilibrium is welfare-efficient: There is no deadweight loss (d) There are no barriers to entry: Every firm earns zero profits
- Assume the following equations describe the conditions for a typical firm in a monopolistically competitive market: P = 6 - .00075qd TC = 4,000 + 2q + .00025q2 where qd is the firm's quantity demanded, P is the commodity's price in dollars, TC is the firm's total cost in dollars and q is the quantity of output produced. Based upon these equations, answer the following questions: a. What quantity of output will the profit-maximizing firm produce in the market's long-run equilibrium? What price will the profit-maximizing firm establish in the long run? Explain how you know this firm is in long-run equilibrium? b. Determine the firm's allocatively efficient quantity of output? c. Determine deadweight loss that exists when this firm is in monopolisitc competition's long-run equilibrium.The following table shows the daily cost data and demand schedule for a typical firm producing board games in a monopolistically competitive market in the short run. Fill in the values in the Marginal Cost, Total Revenue, and Marginal Revenue columns in the following table and then answer the questions that follow. Quantity Price (Board games) (Dollars per game) Total Cost Marginal Cost (Dollars) (Dollars) Total Revenue (Dollars) Marginal Revenue (Dollars) Average Total Cost (Dollars) 1 16.00 14.00 10.00 8.00 6.00 4.00 2.00 2 3 4 5 6 7 8 0.50 12 18 21 24 35 48 63 80 Under monopolistic competition, a typical firm will produce Based on your calculations, the firm will Fill in the Average Total Cost column in the previous table. ^^^^^^^ board games at a price of $ Based on your calculations, the level of excess capacity in this monopolistically competitive market is per board game in the short run.Assume a firm engaging in selling its product and promotional activities in monopolistic competition face short-run demand and cost functions as Q = 20-0.5P and TC= 4Q2 -8Q+15, respectively. Having this information a) Determine the optimal level of output and price in the short run. b) Calculate the economic profit (loss) the firm will obtain (incur). c) Show the economic profit (loss) of the firm in a graphic representation.
- Answer choices are first blank: negative, positive, zero second blank: an equal number of, fewer, moreThe laptop industry is monopolistically competitive. Each firm's total cost function is given by TC = 80,000 + 10Q, where Q is the firm's output. Each firm's demand function is given by Q = S((1/n) - (1/800)(P-V)), where S is industry output, n number of firms, P price of this firm, and V average price of competing firms. (Hint: each firm's marginal revenue function is MR = P - (800Q/S).) Note: show the key steps in your work. a. Home's market size is 4,900. Find the equilibrium in the Home market: what will be each firm's output, price, and number of firms? b. Foreign's market size is 57,600. Find the equilibrium in the Foreign market: what will be each firm's output, price, and number of firms? c. Suppose Home and Foreign integrate their laptop markets. Find the equilibrium in the integrated market: what will be each firm's output, price, and number of firms? d. Intuitively, why does market integration allow both countries to be better off?Suppose you are managing a farming company, which is one of the major producers of Tomato in the State of North Carolina. You have been provided with the following graph which shows the demand curve for the tomatoes that your company is producing. As you can see, there are two known points (X and Y) on a demand curve for tomatoes. According to the “standard" method of computing elasticity (i.e. use the standard formula of percentage change in your computations), the standard-method price elasticity of demand for tomatoes when moving from point X to point Y is approximately Demand 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of pounds of tomatoes)
- The diagram above represents a monopolistically competitive firm. Answer the questions below. Is this firm operating in the short-run or long-run? How do you know? Calculate this firm’s accounting profit. From the diagram, what is the productively efficient output for this firm? From the diagram, economies of scale are maximized at which output level? Explain. From the diagram, what is the allocatively efficient output for this firm? Explain.The following table shows the daily cost data and demand schedule for a typical firm producing board games in a monopolistically competitive market in the short run. Fill in the values in the Marginal Cost, Total Revenue, and Marginal Revenue columns in the following table and then answer the questions that follow. Quantity Price Total Cost Marginal Cost Total Revenue Marginal Revenue Average Total Cost (Вoard games) (Dollars per game) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) 12.00 13 2 10.00 28 3 9.00 30 4 8.00 36 6.00 40 6. 4.00 60 7 2.00 72 8. 1.00 96 Under monopolistic competition, a typical firm will produce board games at a price of $ per board game in the short run. Based on your calculations, the firm will Fill in the Average Total Cost column in the previous table. Based on your calculations, the level of excess capacity in this monopolistically competitive market isDetermine the profit-maximizing output and price, and discuss its implications, if: You are a monopolistically competitive firm and the inverse demand is P = 100 – Q and your cost is C(Q) = 125 + 4Q2 You are a monopoly and the inverse demand is P = 200 – Q and your cost is C(Q) = 150 + 4Q2
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