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

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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:

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

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

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 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:

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:

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

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Students have asked these similar questions

2.) Using the line drawing tool, plot and label the isocost line. Carefully follow the instructions above, and only draw the required objects. FILL IN BLANK d. Now suppose the price of labour rises to $5 per unit, but the firm still wants to produce 500 tires per day. Explain how a cost-minimizing firm adjusts to this change (with no change in technology). A cost-minimizing firm will be producing on ▼ The samedifferently slopedparallel isocost line. The firm will use ▼ moresameless labour and ▼ less the same amount of more capital and produce on ▼ a higher point on the same a lower point on the same a lower a higher isoquant curve.

QK Using the graph on the right, determine how the firm should change the quantity of the production factors in order to reduce the costs. The firm that is producing at point A can reduce its costs for producing 2000 units by employing A. same capital and more labour. B. less capital and more labour. ○ C. less capital and the same labour. D. more capital and more labour. OE. more capital and less labour. C A B Q =4000 Q = 2000 C Isocost line QL

PL Suppose the price ratio is the same along isocost PK lines A and B. In the figure at right, the difference between isocost line A and isocost line B is that A. the total cost is larger along B. B. the total cost is larger along A. OC. labour is relatively more expensive along A. ○ D. the level of output is lower along A. OE. both capital and labour are relatively cheaper along A. Capital B Labour

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

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

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

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