EBK ECON MICRO
6th Edition
ISBN: 9781337671828
Author: MCEACHERN
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Question
Chapter 10, Problem 12P
To determine
Whether each of the following is a characteristic of
- A large number of sellers
- Product is a commodity
- Advertising by firms
- Barriers to entry
- Firms are
price makers
Concept Introduction:
Perfect Competition: Perfect Competition describes a market structure in which the number of buyers and sellers is very large, and the competition among sellers is at its greatest possible level.
Monopolistic Competition: Monopolistic competition is a type of competition where producers offer products that are differentiated from one another (e.g. by quality).
Oligopoly: Oligopoly refers to a market which is dominated by a small number of large sellers (oligopolists). Oligopoly has its own market structure.
Monopoly: Monopoly refers to a market structure where there is a single seller who is engaged in selling a unique product in the market.
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Tasks
Exercise 1
Assess the following functions:
1. f(x)= x2+6x+2
2.f '(x)=10x-2x2+5
a. Find the stationary points. (5 marks)
b. Determine whether the stationary point is a maximum or minimum. (5 marks)
c. Draw the corresponding curves (5 marks)
Problem 2:
The sales data over the last 10 years for the Acme Hardware Store are as follows:
2003
$230,000
2008
$526,000
2004
276,000
2009
605,000
2005
328,000
2010
690,000
2006
388,000
2011
779,000
2007
453,000
2012
873,000
1. Calculate the compound growth rate for the period of 2003 to 2012.
2. Based on your answer to part a, forecast sales for both 2013 and 2014.
3. Now calculate the compound growth rate for the period of 2007 to 2012.
1. Based on your answer to part e, forecast sales for both 2013 and 2014.
5. What is the major reason for the differences in your answers to parts b and d? If you were to
make your own projections, what would you forecast? (Drawing a graph is very helpful.)
Exercise 4A firm has the following average cost: AC = 200 + 2Q – 36
Q
Find the stationary point and determine if it is a maximum or a minimum.b. Find the marginal cost function.
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