Principles Of Economics, Ap Edition, 9781337292603, 1337292605, 2018
8th Edition
ISBN: 9781337292603
Author: Mankiw
Publisher: Cengage Learning (2018)
expand_more
expand_more
format_list_bulleted
Question
Chapter 15, Problem 2PA
Subpart (a):
To determine
The consumer surplus , producer surplus , and total surplus.
Subpart (b):
To determine
The consumer surplus, producer surplus, and total surplus.
Expert Solution & Answer
Trending nowThis is a popular solution!
Learn your wayIncludes step-by-step video
schedule08:21
Students have asked these similar questions
In which of the following situations would Maria's Doughnut Shop have the MOST market power?
Select one:
a. The closest doughnut shop or bakery is 25 miles away from Maria's shop.
b. There are two rival doughnut shops within three miles but no other bakeries.
c. The closest doughnut shop is 10 miles away, but there is a bakery with breakfast pastries two miles away.
d. Within three miles, there are five other doughnut shops and three bakeries that sell breakfast pastries.
QUESTION 1
You are currently on your summer break. You could either enjoy your summer in Hawaii with your friends or
open a sausage stall at the local market with your mom, knowing that the market for sausages is perfectly
competitive.
1. Going to Hawaii with your friends is your explicit cost when deciding to enter the market.
2. If you and your mom decide to open a sausage stall, your demand curve as a seller is perfectly elastic.
3. If you and your mom are expecting to gain a normal profit, you should definitely not enter the market.
Which of the above statements are true?
O Only 1 is true.
Only 2 is true.
Both 1 and 2 are true.
Both 2 and 3 are true.
All three are true.
Comparing a perfectly competitive market to a monopoly, which of the following is true?
a.
Price will be higher and quantity will be lower in the perfectly competitive market than in the monopoly.
b.
Price will be equal to marginal revenue in the perfectly competitive market but will be higher than marginal revenue in the monopoly.
c.
at that point on the market demand curve which intersects the marginal cost curve.
d.
Price will be higher than marginal cost in the perfectly competitive market but will be equal to marginal cost in the monopoly.
Chapter 15 Solutions
Principles Of Economics, Ap Edition, 9781337292603, 1337292605, 2018
Ch. 15.1 - Prob. 1QQCh. 15.2 - Prob. 2QQCh. 15.3 - Prob. 3QQCh. 15.4 - Prob. 4QQCh. 15.5 - Prob. 5QQCh. 15 - Prob. 1CQQCh. 15 - Prob. 2CQQCh. 15 - Prob. 3CQQCh. 15 - Prob. 4CQQCh. 15 - Prob. 5CQQ
Ch. 15 - Prob. 6CQQCh. 15 - Prob. 1QRCh. 15 - Prob. 2QRCh. 15 - Prob. 3QRCh. 15 - Prob. 4QRCh. 15 - Prob. 5QRCh. 15 - Prob. 6QRCh. 15 - Prob. 7QRCh. 15 - Prob. 8QRCh. 15 - Prob. 1PACh. 15 - Prob. 2PACh. 15 - Prob. 3PACh. 15 - Prob. 4PACh. 15 - Prob. 5PACh. 15 - Prob. 6PACh. 15 - Prob. 7PACh. 15 - Prob. 8PACh. 15 - Prob. 9PACh. 15 - Prob. 10PACh. 15 - Prob. 11PACh. 15 - Prob. 12PA
Knowledge Booster
Similar questions
- From the following graph, show the equilibriums under each scenario. Market is in equilibrium at A under competitive market. (a) Show the equilibrium under monopoly. Call this point B (b) When the demand increased in the area due to immigration, show the new competitive equilibrium, call this point C. (c) Show the new monopolistic equilibrium with increased demand and call this point D.arrow_forward(a) What is meant by consumer surplus and producer surplus? Using a diagram show that there is a deadweight loss to society from monopoly in terms of total surplus. (b) In what ways is a monopolistically competitive firm likely to be less efficient than one under perfect competition?arrow_forwardShow in graph a consumers’ surplus when the market is perfectly competitive and when its monoplized.arrow_forward
- Which market offers higher consumer surplus and why? The perfectly competitive firm or the monopoly firm?arrow_forwardCompetitive Supermarkets A small town is served by many competing supermarkets, which all have the same constant marginal cost.Now suppose that the independent supermarkets combine into one chain. Which of the following statements is true about the changes that occur after the supermarkets merge? Check all that apply. Total surplus rises. A.Consumer surplus remains unchanged. B.Producer surplus rises. C.The market price increases. D.The market quantity remains unchanged.arrow_forwardWhat form of competition best characterizes this market? What characteristics did you identify that led you to that conclusion?coffee shop marketarrow_forward
- A perfectly competitive firm is onsidered to be more generous in terms of price and quantity of output in comparison to firm belonged to monopoly and monopolistic markets. C. If firms incurring loss in this market begin to exit the market, what will happen to the market equilibrium? Demonstrate your answer using a simplified graph. d. The firm wishes to supply output more than the quantity determined under the equilibrium condition, is it worth to pursue?arrow_forwardAssume perfect competition takes place in the market for hotel rooms. The the current market equilibrium price of a standard room is RM300 per night. a. Show that the current market balance is efficient, assuming that both the marginal cost borne by the seller and the marginal profit which the buyer feels reflects all the costs and benefits associated with production and use of hotel rooms. Draw a graph to illustrate you answer.arrow_forwardExercise 3.5. Pablo, Dirk and Franz run the only bar in town. Pablo wants to sell as many drinks as possible without losing money. Dirk wants the bar to bring in as much revenue as possible. Franz wants to make the largest possible profits. Using a single diagram of the bar's demand curve and its cost curves, show the price and quantity combinations favoured by each of the three partners. Explain.arrow_forward
- The following graph shows a firm’s marginal cost and average cost of production of raspberries. a. The equilibrium price at this market is $2.5. At this price, is the firm earning economic profit or is itincurring economic losses?b. Is the firm operating in a competitive market based on the given information? Why?c. Suppose the price of raspberries increases to $5. How would you answer a. and b. in this case?d. If the market is indeed competitive, what will happen after the price increase in c.? What will bethe final price and the long-term profit of the firm?arrow_forwardThere are several pen manufacturers in Corinthia. However, the pens sold by each manufacturer have a unique design. How will the demand for pens faced by the existing pen manufacturers in Corinthia be affected if new firms enter the industry in the long run? a. The demand curve faced by the existing firms will become perfectly elastic. b. The demand faced by the existing firms will decrease. c. The demand curve faced by the existing firms will become perfectly inelastic. d. The demand faced by the existing firms will increase.arrow_forwardYou live in a town with 300 Adults and 200 children, and you arc thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000, but selling an extra ticket has zero marginal cost. Here are the demand schedules for your two types of customer: a. To maximize profit, what price would you charge for an adult ticket? For a child's ticket?How much profit do you make?b. The city council passes a law prohibiting you from charging different prices to different customers. What price do you set for a ticket now? How much profit do you make?c. Who is worse off because of the law prohibiting price discrimination? Who is better off? (If you can, quantify the changes in welfare.)d. If the fixed cost of the play were $2,500 rather than $2,000, how would your answers to parts (a), (b), and (c) change?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning