MICROECONOMICS-ACCESS CARD <CUSTOM>
11th Edition
ISBN: 9781266285097
Author: Colander
Publisher: MCG CUSTOM
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Chapter 16, Problem 4QAP
To determine
The suggestion of the statement about the long-term environmental sustainability of free
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Use the following information to answer Questions 3 thru 5.
3. Suppose the kitchen knives industry is now operating in the long-run. What is the profit-maximizing level of output for firms in the long-run? Your answer should
include only numbers.
Submit response
PLEASE NOTE - For Questions 3 thru 5, you need the following LCTC function: LRTC = 2q° – 8q² + 75q
4. How much will each kitchen knife be sold for when the market arrives at the long-run equilibrium? Do not include the $-sign or comma (,) in your answer. Round to
the nearest cent only if necessary
Submit response
5. How many firms will be producing kitchen knives when the market arrives at the long-run equilibrium?
A.
More than 930 firms.
B.
Fewer than 930 firms
C.
Exactly 930 firms.
Suppose that the market for cherries in Shandong Province consists of two firms: Organicherry and Pesticherry. You are the owner of Organicherry, and have discovered a natural way to ward off aphids without resorting to pesticides. This advantage has allowed you to enjoy a relatively higher yield than Pesticherry. You use this advantage to be the first firm to choose its output level. The inverse demand function for a box of cherries is P = 1,125− 5Q (prices are in CN¥). Organicherry’s costs are CO(QO) = 40QO, and Pesticherry’s costs are CP(QP) = 80QP. If there were no official/legal issues in merging the two firm, would it be profitable to merge with Pesticherry? If so, how much would you offer to Pesticherry’s owners? [You may use the facts that, if R(Q)=aQ2 +bQ+c then MR(Q)=2aQ+b and that,ifC(Q)=cQ then MC(Q) = c.]
Based on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD:
Demand:
P=1,200−10QP=1,200−10Q
Total Revenue:
TR=1,200Q−10Q2TR=1,200Q−10Q2
Marginal Revenue:
MR=1,200−20QMR=1,200−20Q
Marginal Cost:
MC=300+10QMC=300+10Q
where QQ indicates the number of copies sold and PP is the price in Ectenian dollars.
Complete the following table by finding the price and quantity that maximize the company's profit and the price and quantity that maximize social welfare.
Scenario
Price
Quantity
(Dollars)
(DVDs)
Maximizes the company's profit
Maximizes social welfare
The deadweight loss from the monopoly is
.
Suppose, in addition to the foregoing costs, the director of the film has to be paid. The company is considering four options:
I.
A flat fee of 2,500 Ectenian dollars
II.
50 percent of the profits
III.
150 Ectenian dollars…
Chapter 16 Solutions
MICROECONOMICS-ACCESS CARD <CUSTOM>
Ch. 16.1 - Prob. 1QCh. 16.1 - Prob. 2QCh. 16.1 - Prob. 3QCh. 16.1 - Prob. 4QCh. 16.1 - Prob. 5QCh. 16.1 - Prob. 6QCh. 16.1 - Prob. 7QCh. 16.1 - Prob. 8QCh. 16.1 - Prob. 9QCh. 16.1 - Prob. 10Q
Ch. 16 - Prob. 1QECh. 16 - Prob. 2QECh. 16 - Prob. 3QECh. 16 - Prob. 4QECh. 16 - Prob. 5QECh. 16 - Prob. 6QECh. 16 - Prob. 7QECh. 16 - Prob. 8QECh. 16 - Prob. 9QECh. 16 - Prob. 10QECh. 16 - Prob. 11QECh. 16 - Prob. 12QECh. 16 - Prob. 1QAPCh. 16 - Prob. 2QAPCh. 16 - Prob. 3QAPCh. 16 - Prob. 4QAPCh. 16 - Prob. 5QAPCh. 16 - Prob. 6QAPCh. 16 - Prob. 1IPCh. 16 - Prob. 2IPCh. 16 - Prob. 3IPCh. 16 - Prob. 4IPCh. 16 - Prob. 5IPCh. 16 - Prob. 6IPCh. 16 - Prob. 7IPCh. 16 - Prob. 8IPCh. 16 - Prob. 9IPCh. 16 - Prob. 10IPCh. 16 - Prob. 11IP
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