Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
20th Edition
ISBN: 9780078021756
Author: McConnell, Campbell R.; Brue, Stanley L.; Flynn Dr., Sean Masaki
Publisher: McGraw-Hill Education
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Question
Chapter 11.6, Problem 4QQ
To determine
Difference between the equilibrium price and consumer-willing price.
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Students have asked these similar questions
I think the answer to this question is B but I am not sure, I think it could also be C.
Consumer surplus in a market for a product would be equal to the area under the demand curve if A) producer surplus was equal to zero. B) marginal cost was equal to the market price. C) the product was produced in a perfectly competitive market. D) the market price was zero.
I'm not sure if I answered these questions correctly.
Suppose a competitive market is comprised of firms that face identical cost curves. The firms experience an increase in demand that results in
positive profits for the firms. Which of the following events are then most likely to occur?
(i)
New firms will enter the market.
In the short run, price will rise; in the long run, price will rise further.
In the long run, all firms will be producing at their efficient scale.
a. (i), (ii) and (iii)
b. (i) and (iii) only
c. (i) and (ii) only
d. (ii) and (iii) only
Chapter 11 Solutions
Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
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- How does underutilization of resources leads to Surplus? Why is it important to the organization to know about this?arrow_forwardThe area under the demand curve but above the equilibrium price is called: a) consumer surplus. b)producer surplus. c)accounting profit. d)economic profit.arrow_forwardWhen is the profit a firm earns equal to the producer surplus? Explainarrow_forward
- a. A firm faces the following average revenue (demand) curve:P = 120 − 0.02Qwhere Q is weekly production and P is price, measured in cents per unit. The firm’s cost function is given by C = 60Q + 25,000. Assume that the firm maximizes profits. i. What is the level of production, price, and total profit per week?ii. If the government decides to levy a tax of 14 cents per unit on this product, what will be the new level of production, price, and profit?arrow_forwardQ1) for a-firm how does the concept of producer surplus differ from that of profit.? Q2) if the supply curve is q=3+1.5p what is the producer surplus if p=12?arrow_forwardAsap plz 1) A food industry is made up of 100 identical companies. Each firm has a short-run cost function which is the square of its output, which is SC = 0.5 q2 + 10q + 5. If the total market demand for the food is Q = 1100 – 50P, Questions: a. Calculate and Draw a graph showing the market point equilibrium b. Calculate how much is the consumer surplus? c. Calculate how much is the producer surplus ?arrow_forward
- Suppose the celery industry is competitive. The (inverse) market demand schedule is: p= 1000.1QD The (inverse) market supply schedule is: Find the following in equilibrium. a. Competitive market output level = b. Competitive market price = $ c. Consumer surplus = $ d. Producer surplus = $ MC = 4+0.2Qs unitsarrow_forward2arrow_forwardInstructions: Answer to the best of your ability. Show all of your work, the details, excel tab. The Market for Good X is perfectly competitive, with market supply and own-price demand curves given as q_s=-25000 + 3000p q_d=135000-5000p a. Determine the equilibrium price and quantity in the market for good x. (Note: You are not anlayzing an individual firm here. You are analyzing the entire market). Suppose the individual firm's average total costs are dfined by TC=1/3q^3-3q^2+28q+2 b. What is the firm's demand curve (don't give me back the industry demand curve. The firm's demand curve is what I want.) c. find the profit maximizing level of output for the firm (I've given the marginal cost curve below). MC=q^2-6q+28 d. If this firm is making a profit (loss) how much is the profit (loss)?arrow_forward
- Consider a perfectly competitive market for frozen meals. The demand for frozen meals is given by Pd = 142 - 4Q and the supply of frozen meals is given by Ps = 13 + Q. What is the value of Consumer Surplus? [Round your answer to 2 decimal places]arrow_forwardOnly typed answer Each firm in a competitive market has a cost function of C(q) = q − q 2 + q 3 . The market has an unlimited number of potential firms. The market demand function is Q = 24 − P. a. Determine the long-run equilibrium price, the quantity per firm, the market quantity, and the number of the firms. b. How do these values change if a tax of $1 per unit is collected from each firm? c. How would these values change if instead of a tax the government implements a price floor of 30?arrow_forwardA competitive market has demand of Q = 50 - 0.5P and total cost of production is C=70q for each firm. What is the effect of an innovation by one firm that gives a marginal cost of $28? a. This is a drastic innovation that causes the market quantity to be 18. b. This is a drastic innovation that causes the market quantity to be 36. c. This is a drastic innovation that causes the market quantity d. This is a non-drastic innovation that causes the market quantity to be 18.arrow_forward
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