The profit maximizing price , output and economic profit on a graph representing demand curve and MR curve.

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Answer 1

Question

Chapter 16, Problem 1SPPA

To determine

To show:

The profit maximizing price, output and economic profit on a graph representing demand curve and MR curve.

Expert Solution & Answer

Explanation of Solution

Given information:

Price	Quantity	TR	MR
10	0	0	-
8	2000	16000	8
6	4000	24000	4
4	6000	24000	0
2	8000	16000	-4
0	10000	0	8

The graph represnting the demand and marginal revenue curve is as shown below:

EBK FOUNDATIONS OF ECONOMICS, Chapter 16, Problem 1SPPA

According to the diagram, the AR represents the demand curve while the marginal revenue curve is represented by the green line. Since the marginal cost is zero, the MC curve overlaps over the horizontal axis (blue color). Marginal revenue curve intersects the marginal cost curve at output level 6000 units (profit maximizing level) and at this point, the profit-maximizing price is 4 dollars. However, the area marked by the yellow color represents the economic profit.

Economics Concept Introduction

Monopoly Market:

Monopoly market is that market structure where a single firm enjoys the largest market share. The firm sells that commodity which has no close substitute and the entry for new firms in the monopoly market is very difficult.

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Students have asked these similar questions

3. Consider the market for paper. The process of producing paper creates pollution. Assume that the marginal damage function for pollution is given by: MDF = 3E where damages are measured in dollars and E is the level of emissions. Assume further that the function describing the marginal abatement cost of emissions is given by MAC 120-E where benefits are measured in dollars and E is the level of emissions. a. Graph the marginal damage function (MDF) and the marginal abatement cost function (MAC). b. What is the unregulated level of emissions Eu? What is the social welfare of this emissions level? c. Assume an existing emission quota limits emissions to E = 60. Show on the graph why this policy is inefficient. What is the deadweight loss caused by this policy?

show written calculation for B

Problem 1: 1. If a stock is expected to pay an annual dividend of $20 forever, what is the approximate present value of the stock, given that the discount rate is 5%? 2. If a stock is expected to pay an annual dividend of $20 forever, what is the approximate present value of the stock, given that the discount rate is 8%? 3. If a stock is expected to pay an annual dividend of $20 this year, what is the approximate present value of the stock, given that the discount rate is 8% and dividends are expected to grow at a rate of 2% per year?

Answer 2

Question

Chapter 16, Problem 1SPPA

To determine

To show:

The profit maximizing price, output and economic profit on a graph representing demand curve and MR curve.

Expert Solution & Answer

Explanation of Solution

Given information:

Price	Quantity	TR	MR
10	0	0	-
8	2000	16000	8
6	4000	24000	4
4	6000	24000	0
2	8000	16000	-4
0	10000	0	8

The graph represnting the demand and marginal revenue curve is as shown below:

EBK FOUNDATIONS OF ECONOMICS, Chapter 16, Problem 1SPPA

According to the diagram, the AR represents the demand curve while the marginal revenue curve is represented by the green line. Since the marginal cost is zero, the MC curve overlaps over the horizontal axis (blue color). Marginal revenue curve intersects the marginal cost curve at output level 6000 units (profit maximizing level) and at this point, the profit-maximizing price is 4 dollars. However, the area marked by the yellow color represents the economic profit.

Economics Concept Introduction

Monopoly Market:

Monopoly market is that market structure where a single firm enjoys the largest market share. The firm sells that commodity which has no close substitute and the entry for new firms in the monopoly market is very difficult.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 16, Problem 1SPPA

To determine

To show:

The profit maximizing price, output and economic profit on a graph representing demand curve and MR curve.

Expert Solution & Answer

Explanation of Solution

Given information:

Price	Quantity	TR	MR
10	0	0	-
8	2000	16000	8
6	4000	24000	4
4	6000	24000	0
2	8000	16000	-4
0	10000	0	8

The graph represnting the demand and marginal revenue curve is as shown below:

EBK FOUNDATIONS OF ECONOMICS, Chapter 16, Problem 1SPPA

According to the diagram, the AR represents the demand curve while the marginal revenue curve is represented by the green line. Since the marginal cost is zero, the MC curve overlaps over the horizontal axis (blue color). Marginal revenue curve intersects the marginal cost curve at output level 6000 units (profit maximizing level) and at this point, the profit-maximizing price is 4 dollars. However, the area marked by the yellow color represents the economic profit.

Economics Concept Introduction

Monopoly Market:

Monopoly market is that market structure where a single firm enjoys the largest market share. The firm sells that commodity which has no close substitute and the entry for new firms in the monopoly market is very difficult.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 16, Problem 1SPPA

To determine

To show:

The profit maximizing price, output and economic profit on a graph representing demand curve and MR curve.

Expert Solution & Answer

Explanation of Solution

Given information:

Price	Quantity	TR	MR
10	0	0	-
8	2000	16000	8
6	4000	24000	4
4	6000	24000	0
2	8000	16000	-4
0	10000	0	8

The graph represnting the demand and marginal revenue curve is as shown below:

EBK FOUNDATIONS OF ECONOMICS, Chapter 16, Problem 1SPPA

According to the diagram, the AR represents the demand curve while the marginal revenue curve is represented by the green line. Since the marginal cost is zero, the MC curve overlaps over the horizontal axis (blue color). Marginal revenue curve intersects the marginal cost curve at output level 6000 units (profit maximizing level) and at this point, the profit-maximizing price is 4 dollars. However, the area marked by the yellow color represents the economic profit.

Economics Concept Introduction

Monopoly Market:

Monopoly market is that market structure where a single firm enjoys the largest market share. The firm sells that commodity which has no close substitute and the entry for new firms in the monopoly market is very difficult.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 16, Problem 1SPPA

To determine

To show:

The profit maximizing price, output and economic profit on a graph representing demand curve and MR curve.

Expert Solution & Answer

Explanation of Solution

Given information:

Price	Quantity	TR	MR
10	0	0	-
8	2000	16000	8
6	4000	24000	4
4	6000	24000	0
2	8000	16000	-4
0	10000	0	8

The graph represnting the demand and marginal revenue curve is as shown below:

EBK FOUNDATIONS OF ECONOMICS, Chapter 16, Problem 1SPPA

According to the diagram, the AR represents the demand curve while the marginal revenue curve is represented by the green line. Since the marginal cost is zero, the MC curve overlaps over the horizontal axis (blue color). Marginal revenue curve intersects the marginal cost curve at output level 6000 units (profit maximizing level) and at this point, the profit-maximizing price is 4 dollars. However, the area marked by the yellow color represents the economic profit.

Economics Concept Introduction

Monopoly Market:

Monopoly market is that market structure where a single firm enjoys the largest market share. The firm sells that commodity which has no close substitute and the entry for new firms in the monopoly market is very difficult.

Answer 6

Chapter 16, Problem 1SPPA

To determine

To show:

The profit maximizing price, output and economic profit on a graph representing demand curve and MR curve.

Expert Solution & Answer

Explanation of Solution

Given information:

Price	Quantity	TR	MR
10	0	0	-
8	2000	16000	8
6	4000	24000	4
4	6000	24000	0
2	8000	16000	-4
0	10000	0	8

The graph represnting the demand and marginal revenue curve is as shown below:

EBK FOUNDATIONS OF ECONOMICS, Chapter 16, Problem 1SPPA

According to the diagram, the AR represents the demand curve while the marginal revenue curve is represented by the green line. Since the marginal cost is zero, the MC curve overlaps over the horizontal axis (blue color). Marginal revenue curve intersects the marginal cost curve at output level 6000 units (profit maximizing level) and at this point, the profit-maximizing price is 4 dollars. However, the area marked by the yellow color represents the economic profit.

Economics Concept Introduction

Monopoly Market:

Monopoly market is that market structure where a single firm enjoys the largest market share. The firm sells that commodity which has no close substitute and the entry for new firms in the monopoly market is very difficult.

Answer 7

Chapter 16, Problem 1SPPA

To determine

To show:

The profit maximizing price, output and economic profit on a graph representing demand curve and MR curve.

Answer 8

Expert Solution & Answer

Explanation of Solution

Given information:

Price	Quantity	TR	MR
10	0	0	-
8	2000	16000	8
6	4000	24000	4
4	6000	24000	0
2	8000	16000	-4
0	10000	0	8

The graph represnting the demand and marginal revenue curve is as shown below:

EBK FOUNDATIONS OF ECONOMICS, Chapter 16, Problem 1SPPA

According to the diagram, the AR represents the demand curve while the marginal revenue curve is represented by the green line. Since the marginal cost is zero, the MC curve overlaps over the horizontal axis (blue color). Marginal revenue curve intersects the marginal cost curve at output level 6000 units (profit maximizing level) and at this point, the profit-maximizing price is 4 dollars. However, the area marked by the yellow color represents the economic profit.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Monopoly Market:

Monopoly market is that market structure where a single firm enjoys the largest market share. The firm sells that commodity which has no close substitute and the entry for new firms in the monopoly market is very difficult.

Answer 12

Ch. 16 - Prob. 1SPPA Ch. 16 - Prob. 2SPPA Ch. 16 - Prob. 3SPPA Ch. 16 - Prob. 4SPPA Ch. 16 - Prob. 5SPPA Ch. 16 - Prob. 6SPPA Ch. 16 - Prob. 7SPPA Ch. 16 - Prob. 8SPPA Ch. 16 - Prob. 9SPPA Ch. 16 - Prob. 10SPPA

The profit maximizing price , output and economic profit on a graph representing demand curve and MR curve.

To show: The profit maximizing price, output and economic profit on a graph representing demand curve and MR curve.

Explanation of Solution

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Chapter 16 Solutions

To show:

The profit maximizing price, output and economic profit on a graph representing demand curve and MR curve.