For each of the following scenarios, identify the number of firms present, the type of product, and the appropriate market model. Select the matching entry for each dropdown box in the following table. Number of Scenario Firms Type of Product Market Model There are hundreds of colleges and universities that serve millions of college students each year. The colleges vary by location, size, and educational quality, which allows students with diverse preferences to find schools that match their needs. There are dozens of pasta producers that sell pasta to hundreds of Italian restaurants nationwide. The restaurant owners buy from the cheapest pasta producer they can. While pasta manufacturers must pay licensing fees to their local government and undergo regular food-safety inspections anyone who han

For each of the following scenarios, identify the number of firms present, the type of product, and the appropriate market model. Select the matching entry for each dropdown box in the following table. Number of Scenario Firms Type of Product Market Model There are hundreds of colleges and universities that serve millions of college students each year. The colleges vary by location, size, and educational quality, which allows students with diverse preferences to find schools that match their needs. There are dozens of pasta producers that sell pasta to hundreds of Italian restaurants nationwide. The restaurant owners buy from the cheapest pasta producer they can. While pasta manufacturers must pay licensing fees to their local government and undergo regular food-safety inspections anyone who han

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the weekly market for gyros in a popular neighborhood close to campus. Suppose this market is operating in long-run competitive equilibrium with many gyro vendors in the neighborhood, each offering basically the same gyros. Due to the structure of the market, the vendors act as price takers and each individual vendor has no market power. The following graph displays the supply (S = MC) and demand (D) curves in the weekly market for gyros. Consider the welfare effects that result from the industry operating as a competitive market versus a monopoly. On the monopoly graph, use the black points (plus symbol) to shade the area that represents the loss of welfare, or deadweight loss, caused by a monopoly. That is, show the area that was formerly part of total surplus and now does not accrue to anybody. Deadweight loss occurs when a market is controlled by a monopoly because the resulting equilibrium is different from the (efficient) competitive outcome. In the…
Entrepreneurs shift capital and labor across industries in pursuit of profit. Let’s look at this a little more closely. Suppose there are two industries: a high‑profit industry, Industry H, and a low‑profit industry, Industry L. Answer the following questions about these two industries. a. If the two industries have similar costs, then what must be true about prices in the two industries? Prices in Industry H and Industry L must be equal. must be lower in Industry H than in Industry L. must be higher in Industry H than in Industry L. in Industry H and Industry L cannot be compared.
For each scenario in the following table, determine which market model best describes the scenario. Then identify the number of firms, the type of product, and the ease with which new firms can enter the market under this market structure. Scenario Hundreds of colleges serve millions of students each year. The colleges vary by location, size, cost, and educational quality, which allows students to match schools to their diverse preferences. Hundreds of high school students who require tutoring in algebra choose among dozens of tutoring companies offering similar services. The taxi companies on all the licences granted by the city. Consumers don't care which taxi company Only one pharmaceutical company has a government patent to sell an experimental drug Number of Firms Type of Product Entry Market Model
Q8. What role does the U.S. government play with respect to market competition? a.) It preserves competition by regulating prices and intervening in the price and output decisions of businesses. b.) It preserves competition by maintaining abundant government-owned firms to ensure consumer-friendly pricing. c.) It polices anticompetitive behavior and prohibits contracts that restrict competition.
Assume that private schools form a competitive industry. Suppose the demand for private schools rises because the government initiates a new program to offer income tax rebates to parents with children in private schools. In the short run, what happens to the number of students in private schools? What happens to the profits of each school? Answer by making two clearly labeled graphs (industry and firm-level) with clear explanations.
The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $20, $12, $8, $4, and $2 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $8, $12, $20, $32, and $44 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied. Price Quantity Demanded Quantity Supplied ($ per widget) (widgets) (widgets) $2 $4 $8 $12 $20 $32 $44 In this market, the equilibrium price will be______ per widget, and the equilibrium quantity will be ___ (#) widgets.
The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $26, $14, $10, $5, and $3 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $10, $14, $26, $34, and $42 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied. Price Quantity Demanded Quantity Supplied ($ per widget) (widgets) (widgets) $3 $5 $10 $14 $26 $34 $42 In this market, the equilibrium price will be per widget, and the equilibrium quantity will be widgets.
Eric owns a plot of land in the desert that isn't worth much. One day, a giant meteorite falls on his property, making a large crater. The event attracts scientists and tourists, and Eric decides to sell nontransferable admission tickets to the meteor crater to both types of visitors: scientists (Market A) and tourists (Market B). The following graphs show daily demand (DD) curves and marginal revenue (MRMR) curves for the two markets. Eric's marginal cost of providing admission tickets is zero. PRICE (Dollars per ticket) 20 18 16 9 09 2 0 0 1 Market A MR 2 3 4 5 6 7 8 QUANTITY (Admission tickets) Pricing Policy Nondiscriminatory Discriminatory D 0 10 Total Revenue (Dollars) PRICE (Dollars per ticket) 20 18 18 14 12 10 8 4 2 0 0 1 low Market B Imagine that at first, Eric charges the same price of $8 per admission in both markets so that the total number of admissions demanded is Tickets. Imagine now that Eric decides to charge a different price in each market. To maximize revenue, Eric…
Pizzaroni Cafe on the boardwalk in a popular New Jersey seaside town owned by Angelo McDonald. Situation: Due to the booming tourist season and the exceptional meals he prepares, Angelo is frequently forced to turn away patrons because he does not have enough room to accommodate everyone or because he does not have enough servers and kitchen help, especially on Friday and Saturday nights. Currently, the Pizzaroni Cafe has several pinball and video games that are barely earning enough to pay their monthly rental fees. Angelo brags that the tables in his establishment are exceptionally roomy and have large areas of space in- between tables. Chuck’s Hoagie House, the eating establishment alongside of him in the same building has difficulty attracting patrons due to a rumor that several customers contracted food poisoning last September at his establishment. A) What possible options are available to Angelo to increase the number of patrons he can serve in the short run in an effort to…
D1 D2 P2 P1-L Q1 Q2 Company X is a Georgia-based automobile manufacturer that produces a single model of car, the Destiny. Another company, Company Y, produces a car known as the Kismet that is widely viewed by the automobile industry as the Destiny's equal. Which of the following developments would MOST LIKELY lead to the changes illustrated on the graph in the market for the Destiny? a significant decline in the price of the Kismet a significant rise in the income levels of consumers interested in the Destiny
Monopoly outcome versus perfectly competitive outcome Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run perfectly competitive equilibrium, with many hot dog stands in the city, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power. The following graph shows the demand (D) and supply curves (S = MC) in the market for hot dogs. Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from perfect competition. Use the green point (triangle symbol) to shade the area that represents consumers’ surplus, and use the purple point (diamond symbol) to shade the area that represents producers’ surplus. (graph 1) Assume that one of the hot dog vendors successfully lobbies the city council to obtain the exclusive right to sell hot dogs within the city limits. This firm buys up all the rest of the hot dog vendors in the city and…
The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $30, $20, $10, $5, and $3 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $10, $20, $30, $38, and $44 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied. Quantity Demanded Quantity Supplied (widgets) Price ($ per widget) $3 $5 $10 $20 $30 $38 $44 (widgets)