EBK MICROECONOMICS
12th Edition
ISBN: 8220100659454
Author: PARKIN
Publisher: PEARSON
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Question
Chapter 12, Problem 1SPA
To determine
What is the type of market that Lin operates and what determines the
Expert Solution & Answer
Explanation of Solution
The market where there are many buyers and sellers of the uniform commodities and each one with the complete market knowledge and complete freedom of entry and exit into the market is known as the perfect competition. Here in the case of Lin, he operates in a market where there are many producers and all produce the very same commodity, which is here, the cookie. Anyone can enter or exit from the market at any time, which means there are no barriers to entry and exit from the market. These indicates that the market that Lin operates has the characteristics of
The price is determined at the point of equilibrium between the market
The perfectly competitive market has a condition that determines the efficiency maximizing level and it is the level at which the price equals marginal cost equals marginal revenue. Thus, MR equals MC equals Price under perfect competition. The marginal revenue is the additional revenue generated through the sale of an additional unit of commodity in the market. Since the MR = MC = P under perfect competition, the marginal revenue of Lin is determined by the price level in the market.
Economics Concept Introduction
Market: Market is a place where the prospective buyers and sellers interact with each other and the exchange of goods and services takes place between the seller and the buyer at a mutually agreed price level.
Perfect competition: Perfect competition is a market condition where there are a large number of buyers and sellers in the market, perfect knowledge of the market to the buyers and sellers, uniform commodities, and there is freedom of entry and exit in the market.
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Students have asked these similar questions
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.
Chapter 12 Solutions
EBK MICROECONOMICS
Ch. 12.1 - Prob. 1RQCh. 12.1 - Prob. 2RQCh. 12.1 - Prob. 3RQCh. 12.1 - Prob. 4RQCh. 12.2 - Prob. 1RQCh. 12.2 - Prob. 2RQCh. 12.2 - Prob. 3RQCh. 12.3 - Prob. 1RQCh. 12.3 - Prob. 2RQCh. 12.3 - Prob. 3RQ
Ch. 12.4 - Prob. 1RQCh. 12.4 - Prob. 2RQCh. 12.5 - Prob. 1RQCh. 12.5 - Prob. 2RQCh. 12.5 - Prob. 3RQCh. 12.6 - Prob. 1RQCh. 12.6 - Prob. 2RQCh. 12.6 - Prob. 3RQCh. 12.6 - Prob. 4RQCh. 12 - Prob. 1SPACh. 12 - Prob. 2SPACh. 12 - Prob. 3SPACh. 12 - Prob. 4SPACh. 12 - Prob. 5SPACh. 12 - Prob. 6SPACh. 12 - Prob. 7SPACh. 12 - Prob. 8SPACh. 12 - Prob. 9SPACh. 12 - Prob. 10APACh. 12 - Prob. 11APACh. 12 - Prob. 12APACh. 12 - Prob. 13APACh. 12 - Prob. 14APACh. 12 - Prob. 15APACh. 12 - Prob. 16APACh. 12 - Prob. 17APACh. 12 - Prob. 18APACh. 12 - Prob. 19APACh. 12 - Prob. 20APACh. 12 - Prob. 21APACh. 12 - Prob. 22APACh. 12 - Prob. 23APA
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