QUESTION 24 Refer to the information provided in Figure 12.4 below to answer the question(s) that follow. a. Industry X Price per unit of X (S) Price per unit of Y ($) 0 so b. Industry Y Q¹0⁰ S¹ D¹ Units of X SO DI Dº Units of Y Figure 12.4 There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of sº and Dº. Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, firms in sector X are now earning profits; breaking even O breaking even; breaking even O earning profits; suffering losses breaking even; suffering losses and firms in sector Y are now

QUESTION 24 Refer to the information provided in Figure 12.4 below to answer the question(s) that follow. a. Industry X Price per unit of X (S) Price per unit of Y ($) 0 so b. Industry Y Q¹0⁰ S¹ D¹ Units of X SO DI Dº Units of Y Figure 12.4 There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of sº and Dº. Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, firms in sector X are now earning profits; breaking even O breaking even; breaking even O earning profits; suffering losses breaking even; suffering losses and firms in sector Y are now

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The information in the table shows the total demand for water service in Takoma. Assume that there are two companies operating in Takoma. Each company that provides these services incurs an annual fixed cost of $400 and that the marginal cost of providing the service to each customer is exactly $2.00. Figures listed are for an annual service contract. Quantity 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 Price 60 55 50 45 40 35 30 25 b. Refer to Table 17-36. Suppose these 2 firms are price competing with each other (as what happens in a perfectly competitive market). What would total output be? a. 0 21250 1200
A friend has just started up her own business. Her firm asks you how much to charge for her product to maximize profits. The demand schedule for it is given by the first two columns in the table below; its total costs are given in the third column. For each level of output, you can calculate total revenue, marginal revenue, average cost, and marginal cost. The profit-maximizing level of output can be found at the point where TR - TC is greatest, or where MR = MC, (or the last quantity where MR is still greater than MC.) What is the profit-maximizing level of output for her product? 40 How much will she earn in profits? 80 Price Quantity TC TR? MR? MC? $25.00 0 $130 $24.00 10 $275 $23.00 20 $435 $22.50 30 $610 $22.00 40 $800 $21.60 50 $1,005 $21.20 60 $1,225
1. A competitive industry is composed of 24 identical firms. Each firm has the following marginal cost of production in the short-run: MC = 58 +8Q. Each firm has the following Total Cost of production in the short-run: TC = 2 + 58Q +4Q². Demand for the product is given by the following demand curve: Qd = 1,211 - 2P. a. Explain why each firm will produce where market equilibrium price (Pe) equals the firm's marginal cost of production (MC). b. Derive an equation for the industry supply curve (i.e., Q₁ = .....). c. Find the market equilibrium price and quantity.. d. Are firms in this industry earning profit or losses in the short-run? (Hint: first compute how much output each firm produces). e. Compute the deadweight loss that would be produced if the government placed a $15 per unit tax on suppliers.. f. Who bore the greater burden of the tax, consumers or producers? Explain.
Identification. Answer the following questions below. QUESTIONS: 1.) What are the ways to cut firm's production costs? 2.) What determines the firm's market power or competitive advantage? 3.) Graphically, in a purely competitive market, demand is equal to what? 4.) Using curves, graphically, a firm will shutdown if what? 5.) What is an output at which the firm makes a normal profit but noteconomic profit?
Q7 Assume that Bandai Namco, the world's largest toy manufacturer, a monopolist, calculates that at its current toys output level, marginal revenue (MR) is $3.25 and marginal cost (MC) is $2.50. Bandai Namco could maximize profits or minimize losses by Multiple Choice decreasing price and leaving output unchanged. decreasing price and increasing output. increasing price and decreasing output. doing nothing. decreasing output and leaving price unchanged.
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7. Short-run supply and long-run equilibrium Consider the competitive market for ruthenium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. COSTS (Dollars per pound) 100 90 80 70 40 30 20 10 0 0 MC D 5 10 ATC 15, 15 AVC ☐ 15 20 25 30 35 QUANTITY (Thousands of pounds) 40 + 45 50 The following graph plots the market demand curve for ruthenium. (?)
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…
The table shows the demand curve for monster trucks. There are two monster truck producers. For simplicity, assume that the cost of producing a monster truck is zero. (AC=0AC=0, FC=0FC=0) Q demanded Price 11 $18$18 22 $16$16 33 $14$14 44 $12$12 55 $10$10 66 $9$9 77 $7$7 88 $6$6 99 $5$5 Assume the two producers initially collude to maximize profits, splitting production and profits evenly. What price will they charge? $ What is the total quantity produced? monster trucksmonster trucks What are the profits for each firm? $ If one of the producers produces an extra unit to get higher profits, what is the new market price? $ What are the profits for this firm when it breaks the agreement? $ What are the other firm's profits after the agreement is broken?