The diagram on the right shows the short-run demand curve (0), marginal revenue curve (MR), average total cost curve (ATC), and marginal cost curve (MC) for a firm in a monopolistically competitive market. 30 28 26- This firm should produce units of output. (Enter your response as an integer.) 244 22 This firm should charge a price of S integer.) per unit. (Enter your response as an 20- 18 MC 16 This firm will earn economic profits. 14- 12 10- AC 6- 4- 2- 12 16 40 44 48 52 aoud

The diagram on the right shows the short-run demand curve (0), marginal revenue curve (MR), average total cost curve (ATC), and marginal cost curve (MC) for a firm in a monopolistically competitive market. 30 28 26- This firm should produce units of output. (Enter your response as an integer.) 244 22 This firm should charge a price of S integer.) per unit. (Enter your response as an 20- 18 MC 16 This firm will earn economic profits. 14- 12 10- AC 6- 4- 2- 12 16 40 44 48 52 aoud

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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6. Breakdown of a cartel agreement Consider a town in which only two residents, Sean and Yvette, own wells that produce water safe for drinking. Sean and Yvette can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water. Price Quantity Demanded Total Revenue (Dollars per gallon) (Gallons of water) (Dollars) 6.00 5.50 45 248 5.00 90 450 4.50 135 608 4.00 180 720 3.50 225 788 3.00 270 810 2.50 315 788 2.00 360 720 1.50 405 608 1.00 450 450 0.50 495 248 540
4. A pharmaceutical firm is marketing a patented drug it has developed (the firm therefore has monopoly rights over the drug). The demand for the drug is given by Q = 8000 - 8P (MR(Q) = 1000 - ), where P is the price of the drug (in cents), and the total cost of production is TC(Q) = Q2+100Q+10000 (MC(Q) = 2Q + 100). a. Calculate the (monopoly) price of the drug, PM, and the quantity sold, QM b. Suppose now that the drug's patent expires, and other pharmaceutical firms can begin producing it. Assume this result in a competitive supply of the drug, and calculate the long-run competitive equilibrium price and aggregate quantity. Compare these to those you found in part a.
Gouge-em Cable Company is the only cable television servicecompany licensed to operate in Backwater County. Most of itscosts are access fees and maintenance expenses. These fixed costs total $640,000 monthly. The marginal cost of addinganother subscriber to its system is constant at $2 per month.Gouge-em’s demand curve can be determined from the datain the accompanying table. a. What price will Gouge-em charge for its cable services?What are its profits at this price?b. Now suppose the Backwater County Public UtilityCommission has the data and believes that cablesubscription rates in the county are too expensive and thatGouge-em’s profits are unfairly high. What regulated pricewill it set so that Gouge-em makes only a normal rate ofreturn on its investment?
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Because this market is monopolistically competitive, you can tell that it is in long-run equilibrium by the fact that at the optimal quantity for each firm. Further, the quantity the firm produces in long-run equilibrium is the efficient scale. True or False: This indicates that there is excess capacity in the market for jackets. O True False Monopolistically competitive markets may be socially inefficient due to the presence of too many or too few firms. The presence of the externality implies that there is too much entry of new firms in the market.
39 Output Total Total (Q) Price Revenue Cost 1 $20.00 $2.50 i of 2 $15.00 $5.00 $10.00 $7.50 4 $5.00 $10.00 The table above shows demand and cost information for a firm that has market power and can set its price. If the firm can only charge one price to all its customers (it cannot price discriminate), it's profit maximizing Output (Q) is: Select one: a. 1 b. 3 C. 4 d. 2
===>Please give me proper explanation Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
4. Comparing monopolistic competition and perfect competition Suppose that a firm produces tennis racquets in a monopolistically competitive market. The following graph shows its demand curve (D), marginal revenue curve (MR), marginal cost curve (MC), and long-run average cost curve (LRAC). Assume that all firms in the industry face the same cost structure. Place the tan point (dash symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place the purple point (diamond symbol) to indicate the point at which this firm would produce in the long run if it operated in a perfectly competitive market. Note: Dashed drop lines will automatically extend to both axes. PRICE, COSTS, AND REVENUE (Dollars per racquet) 100 90 80 70 60 50 40 30 20 10 MC 0 0 LRAC MR D 10 20 30 40 50 60 70 80 QUANTITY (Thousands of racquets per month) 90 100 Monopolistic Competition Outcome Perfect Competition Outcome ?
Table 17-4 Only two firms, ABC and MNO, sell a particular product. The following table shows the demand curve for their product. Each firm has the same constant marginal cost of $4 and zero fixed cost. Price (Dollars per unit) 14 13 12 11 11 10 9 8 7 7 6 5 5 A 4 3 2 2 1 0 Quantity Demanded Total Revenue (Dollars) 0 65 120 QUESTION 9 (Units) 0 5 10 15 20 20 25 30 35 40 45 50 55 60 65 70 165 200 200 225 240 245 240 225 200 165 120 65 0 Refer to Table 17-4. If ABC and MNO operate to jointly maximize profits and agree to share the profit equally, then how much profit will each of them earn? O a. $125.00 O b. $62.50 O c. $225.00 O d. $24.00
3. Assume that a profit-maximizing firm in a monopolistically competitive industry is in long-run equilibrium. (a) Draw a correctly labeled graph that shows the profit-maximizing firm's price and output. (b) Assume that the city in which this industry operates eliminates the business license fee (a fixed cost) for all firms in this industry. How does the elimination of the license fee affect each of the following for the individual firm in the short run? Explain your answers. (i) Output (ii) Economic profits
Refer to the table below. How much profit would this firm make if it produces 2 units of goods? Q P TR MR TC MC 0 $30 0 - $15 - 1 $30 $30 $30 $25 $10 2 $30 $60 $30 $40 $15 3 $30 $90 $30 $60 $20 4 $30 $120 $30 $85 $25 5 $30 $150 $30 $115 $30 6 $30 $180 $30 $150 $35 Group of answer choices $20 $35 $30