Microeconomics:
4th Edition
ISBN: 9781464143878
Author: Paul Krugman
Publisher: Worth Publishers
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Question
Chapter 12, Problem 8P
To determine
- The firm’s marginal cost and the firm’s
average variable cost and the average total cost for all output levels except zero.
- The short run industry supply curve and the market demand curve if there are 100 firms in this industry that all have costs identical to those of this firm.
- The market
price and the profit earned by each firm
Concept Introduction:
Marginal Cost − It is the cost of producing an additional unit of output.
Average Variable cost - It is the firm’s variable cost that is expressed in terms of a unit.
Average Total Cost - It is the firm’s total cost that is expressed in terms of each unit.
Demand - It is the quantity of a commodity that a consumer is willing to purchase at a particular price in a given period of time.
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Exercise 5Consider the demand and supply functions for the notebooks market.QD=10,000−100pQS=900pa. Make a table with the corresponding supply and demand schedule.b. Draw the corresponding graph.c. Is it possible to find the price and quantity of equilibrium with the graph method? d. Find the price and quantity of equilibrium by solving the system of equations.
1. Consider the market supply curve which passes through the intercept and from which the marketequilibrium data is known, this is, the price and quantity of equilibrium PE=50 and QE=2000.a. Considering those two points, find the equation of the supply. b. Draw a graph for this equation.
2. Considering the previous supply line, determine if the following demand function corresponds to themarket demand equilibrium stated above. QD=.3000-2p.
Supply and demand functions show different relationship between the price and quantities suppliedand demanded. Explain the reason for that relation and provide one reference with your answer.
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