Quantity TC FC VC AFC *** **** *******     1000 1000   ** *   *   50 1500 1000 500 20       100 1800 1000   10       150 2400 1000   6.7       200 3200 1000   5       250 4500 1000   4       300 6000 1000 キ 3.3       (a) Assume the market price is $26:Quantity Revenue Profit At what price is the firm earning normal profit?

HighFlyer Airlines wants to build new airplanes with greatly increased cabin space. This will allow HighFlyer Airlines to give passengers more comfort and sell more tickets at a higher price. However, redesigning the cabin means rethinking many other elements of the airplane as well, like engine and luggage placement, and the most efficient shape of the plane for moving through the air. HighFlyer Airlines has developed a list of possible methods to increase cabin space, along with estimates of how these approaches would affect the planes operating costs and ticket sales. Based on these estimates, Table 13.5 shows the value of R, how much should the firm invest in R on top of the private return; that is, an R private return to HighFlyer Airlines would have a 9 social return. How much investment is socially optimal at the 6 interest rate?

Look at Table 8.13. What would happen to the films profits if the market price increases to 6 per pack of raspberries?

A firm in a competitive market receives 500 in total revenue and has marginal revenue of 10. What is the average revenue, and how many units were sold?

What are the gains from competition?

A firms marginal cost curve above the average variable cost curve is equal to the films individual supply curve. This means that every time a firm receives a price from the market it will be willing to supply the amount of output where the price equals marginal cost. What happens to the films individual supply curve if marginal costs increase?

Why are urban areas willing to subsidize urban transit systems? Does the argument for subsidies make sense to you?

If you were developing a product (like a web browser) for a market with significant barriers to entry, how would you try to get your product into the market successfully?

What term would an economist use to describe what happens when a shopper gets in good deal on a product?