Price Effect: After a change in price, each additional unit was sold at a changed price. This will result in an increase or decrease in revenue of the producer. This is known as the price effect on the revenue. Quantity effect: After an increase or decrease in price, fewer units are sold which results in lower revenue. This is known as the quantity effect on the revenue.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 9, Problem 1P

To determine

Concept Introduction:

Price Effect: After a change in price, each additional unit was sold at a changed price. This will result in an increase or decrease in revenue of the producer. This is known as the price effect on the revenue.

Quantity effect: After an increase or decrease in price, fewer units are sold which results in lower revenue. This is known as the quantity effect on the revenue.

Expert Solution & Answer

Explanation of Solution

a. Price and Quantity effect for BASF.

From the table, it is clear that if BASF will produce 10 more tons, then the price will fall from $4 to $3 per ton. So, with the fall in price BASF has to reduce price of each of the 40 tons.

Price effect will be:

EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 1

Quality effect will be the price at which additional 10 tons were sold:

EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 2

As the marginal cost is zero, additional production will not incur any extra cost on BASF, but it will incur either loss or revenue due to an increase in production; therefore it has no incentive to produce 10 tons of an additional unit.

Conclusion:

Thus, the price effect is EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 3 and the quantity effect is $30.

b. Price and Quantity effect for BASF when Roche enters the market:

If BASF wants to produce 10 more tons then the price will fall from $4 to $3 per ton.

Due to the duopoly type of market, with the fall in price, BASF must reduce the price on each of the 20 tons only.

Price effect will be:

EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 4

Quality effect will be the price at which an additional 10 tons were sold:

EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 5

As the marginal cost is zero, the additional production will not incur any additional cost on BASF. Revenue will be increased by $10 with an increase in production.

Conclusion:

Thus, the price effect is EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 6 and the quantity effect is $30.

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!

Students have asked these similar questions

Asap please

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.)

Answer 2

Question

Chapter 9, Problem 1P

To determine

Concept Introduction:

Price Effect: After a change in price, each additional unit was sold at a changed price. This will result in an increase or decrease in revenue of the producer. This is known as the price effect on the revenue.

Quantity effect: After an increase or decrease in price, fewer units are sold which results in lower revenue. This is known as the quantity effect on the revenue.

Expert Solution & Answer

Explanation of Solution

a. Price and Quantity effect for BASF.

From the table, it is clear that if BASF will produce 10 more tons, then the price will fall from $4 to $3 per ton. So, with the fall in price BASF has to reduce price of each of the 40 tons.

Price effect will be:

Quality effect will be the price at which additional 10 tons were sold:

As the marginal cost is zero, additional production will not incur any extra cost on BASF, but it will incur either loss or revenue due to an increase in production; therefore it has no incentive to produce 10 tons of an additional unit.

Conclusion:

Thus, the price effect is EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 3 and the quantity effect is $30.

b. Price and Quantity effect for BASF when Roche enters the market:

If BASF wants to produce 10 more tons then the price will fall from $4 to $3 per ton.

Due to the duopoly type of market, with the fall in price, BASF must reduce the price on each of the 20 tons only.

Price effect will be:

Quality effect will be the price at which an additional 10 tons were sold:

As the marginal cost is zero, the additional production will not incur any additional cost on BASF. Revenue will be increased by $10 with an increase in production.

Conclusion:

Thus, the price effect is EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 6 and the quantity effect is $30.

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 9, Problem 1P

To determine

Concept Introduction:

Price Effect: After a change in price, each additional unit was sold at a changed price. This will result in an increase or decrease in revenue of the producer. This is known as the price effect on the revenue.

Quantity effect: After an increase or decrease in price, fewer units are sold which results in lower revenue. This is known as the quantity effect on the revenue.

Expert Solution & Answer

Explanation of Solution

a. Price and Quantity effect for BASF.

From the table, it is clear that if BASF will produce 10 more tons, then the price will fall from $4 to $3 per ton. So, with the fall in price BASF has to reduce price of each of the 40 tons.

Price effect will be:

Quality effect will be the price at which additional 10 tons were sold:

As the marginal cost is zero, additional production will not incur any extra cost on BASF, but it will incur either loss or revenue due to an increase in production; therefore it has no incentive to produce 10 tons of an additional unit.

Conclusion:

Thus, the price effect is EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 3 and the quantity effect is $30.

b. Price and Quantity effect for BASF when Roche enters the market:

If BASF wants to produce 10 more tons then the price will fall from $4 to $3 per ton.

Due to the duopoly type of market, with the fall in price, BASF must reduce the price on each of the 20 tons only.

Price effect will be:

Quality effect will be the price at which an additional 10 tons were sold:

As the marginal cost is zero, the additional production will not incur any additional cost on BASF. Revenue will be increased by $10 with an increase in production.

Conclusion:

Thus, the price effect is EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 6 and the quantity effect is $30.

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 9, Problem 1P

To determine

Concept Introduction:

Price Effect: After a change in price, each additional unit was sold at a changed price. This will result in an increase or decrease in revenue of the producer. This is known as the price effect on the revenue.

Quantity effect: After an increase or decrease in price, fewer units are sold which results in lower revenue. This is known as the quantity effect on the revenue.

Expert Solution & Answer

Explanation of Solution

a. Price and Quantity effect for BASF.

From the table, it is clear that if BASF will produce 10 more tons, then the price will fall from $4 to $3 per ton. So, with the fall in price BASF has to reduce price of each of the 40 tons.

Price effect will be:

Quality effect will be the price at which additional 10 tons were sold:

As the marginal cost is zero, additional production will not incur any extra cost on BASF, but it will incur either loss or revenue due to an increase in production; therefore it has no incentive to produce 10 tons of an additional unit.

Conclusion:

Thus, the price effect is EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 3 and the quantity effect is $30.

b. Price and Quantity effect for BASF when Roche enters the market:

If BASF wants to produce 10 more tons then the price will fall from $4 to $3 per ton.

Due to the duopoly type of market, with the fall in price, BASF must reduce the price on each of the 20 tons only.

Price effect will be:

Quality effect will be the price at which an additional 10 tons were sold:

As the marginal cost is zero, the additional production will not incur any additional cost on BASF. Revenue will be increased by $10 with an increase in production.

Conclusion:

Thus, the price effect is EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 6 and the quantity effect is $30.

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 9, Problem 1P

To determine

Concept Introduction:

Price Effect: After a change in price, each additional unit was sold at a changed price. This will result in an increase or decrease in revenue of the producer. This is known as the price effect on the revenue.

Quantity effect: After an increase or decrease in price, fewer units are sold which results in lower revenue. This is known as the quantity effect on the revenue.

Expert Solution & Answer

Explanation of Solution

a. Price and Quantity effect for BASF.

From the table, it is clear that if BASF will produce 10 more tons, then the price will fall from $4 to $3 per ton. So, with the fall in price BASF has to reduce price of each of the 40 tons.

Price effect will be:

Quality effect will be the price at which additional 10 tons were sold:

As the marginal cost is zero, additional production will not incur any extra cost on BASF, but it will incur either loss or revenue due to an increase in production; therefore it has no incentive to produce 10 tons of an additional unit.

Conclusion:

Thus, the price effect is EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 3 and the quantity effect is $30.

b. Price and Quantity effect for BASF when Roche enters the market:

If BASF wants to produce 10 more tons then the price will fall from $4 to $3 per ton.

Due to the duopoly type of market, with the fall in price, BASF must reduce the price on each of the 20 tons only.

Price effect will be:

Quality effect will be the price at which an additional 10 tons were sold:

As the marginal cost is zero, the additional production will not incur any additional cost on BASF. Revenue will be increased by $10 with an increase in production.

Conclusion:

Thus, the price effect is EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 6 and the quantity effect is $30.

Answer 6

Chapter 9, Problem 1P

To determine

Concept Introduction:

Price Effect: After a change in price, each additional unit was sold at a changed price. This will result in an increase or decrease in revenue of the producer. This is known as the price effect on the revenue.

Quantity effect: After an increase or decrease in price, fewer units are sold which results in lower revenue. This is known as the quantity effect on the revenue.

Expert Solution & Answer

Explanation of Solution

a. Price and Quantity effect for BASF.

From the table, it is clear that if BASF will produce 10 more tons, then the price will fall from $4 to $3 per ton. So, with the fall in price BASF has to reduce price of each of the 40 tons.

Price effect will be:

Quality effect will be the price at which additional 10 tons were sold:

As the marginal cost is zero, additional production will not incur any extra cost on BASF, but it will incur either loss or revenue due to an increase in production; therefore it has no incentive to produce 10 tons of an additional unit.

Conclusion:

Thus, the price effect is EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 3 and the quantity effect is $30.

b. Price and Quantity effect for BASF when Roche enters the market:

If BASF wants to produce 10 more tons then the price will fall from $4 to $3 per ton.

Due to the duopoly type of market, with the fall in price, BASF must reduce the price on each of the 20 tons only.

Price effect will be:

Quality effect will be the price at which an additional 10 tons were sold:

As the marginal cost is zero, the additional production will not incur any additional cost on BASF. Revenue will be increased by $10 with an increase in production.

Conclusion:

Thus, the price effect is EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 6 and the quantity effect is $30.

Answer 7

Chapter 9, Problem 1P

To determine

Concept Introduction:

Price Effect: After a change in price, each additional unit was sold at a changed price. This will result in an increase or decrease in revenue of the producer. This is known as the price effect on the revenue.

Quantity effect: After an increase or decrease in price, fewer units are sold which results in lower revenue. This is known as the quantity effect on the revenue.

Answer 8

Expert Solution & Answer

Explanation of Solution

a. Price and Quantity effect for BASF.

From the table, it is clear that if BASF will produce 10 more tons, then the price will fall from $4 to $3 per ton. So, with the fall in price BASF has to reduce price of each of the 40 tons.

Price effect will be:

Quality effect will be the price at which additional 10 tons were sold:

As the marginal cost is zero, additional production will not incur any extra cost on BASF, but it will incur either loss or revenue due to an increase in production; therefore it has no incentive to produce 10 tons of an additional unit.

Conclusion:

Thus, the price effect is EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 3 and the quantity effect is $30.

b. Price and Quantity effect for BASF when Roche enters the market:

If BASF wants to produce 10 more tons then the price will fall from $4 to $3 per ton.

Due to the duopoly type of market, with the fall in price, BASF must reduce the price on each of the 20 tons only.

Price effect will be:

Quality effect will be the price at which an additional 10 tons were sold:

As the marginal cost is zero, the additional production will not incur any additional cost on BASF. Revenue will be increased by $10 with an increase in production.

Conclusion:

Thus, the price effect is EBK ESSENTIALS OF ECONOMICS, Chapter 9, Problem 1P , additional homework tip 6 and the quantity effect is $30.