Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

problem: Cost

a) Complete the given table:

958_cost table.jpg

b) Draw one graph of ATC, AVC and MC. Draw other graph with TC.

c) What happens to ATC as Q increases?

d) Where does MC cross AVC? ATC?

e) Assume that fixed costs increase by $20.  How will this influence TFC, TVC, TC, ATC, AVC and MC? Which numbers change and which stay similar?

f) Assume that raw material prices increase by 20%.  How will this influence TFC, TVC, TC, ATC, AVC and MC?

problem: Perfect Competition

a) What does it signify for a market to be perfectly competitive? What are the three conditions of perfect competition?  What does it signify for firms to be ‘price takers’?

b) Let’s focus on just the per unit information from the table in problem #1. Complete the table.

1890_perfect competition table.jpg

c) Assume that the market price of this product is $57. How much would a profit maximizing firm choose to produce?  Compute profits or losses.

Please note there are two ways to find the right answer to these problems. The tough way is to compute total revenue, total cost and profit for each possible quantity and then pick the Q that yields the maximum profit.

The simple way is to use marginal analysis. As I’m going to ask you to do this several more times with different prices, I propose you figure out the simple way.

468_profit or loss.jpg

d) How high does the price require being for firms to be able to make a profit? This is the long run shutdown price – if a firm can’t make a profit it will shutdown at certain point.

e) How low can the price go before a firm will shut down instantly?

f) Now let’s scale up from 1 firm to many firms. Assume that there are 500 identical firms competing in this industry.  Complete the table (it is really a supply schedule).

255_quantity supplied.jpg

g) Graph the industry supply curve with Q on the horizontal and P on the vertical.

h) Take the given data on demand and add up it to your graph. Find the equilibrium price in this market.

83_equillibrium market.jpg

i) How are firms doing at the equilibrium price? Are they earning profits or losing money? Do you expect the number of firms to mount or drop in this industry?

problem: Monopoly.

Use all the information on costs from problem #1, but now our firm has gained a monopoly and is the only seller for this product. Use the information in this table on demand, altogether with info on costs to answer the problems.

a) Complete the table.

2278_monopoly table.jpg

b) Graph Demand, MC, and MR.

c) How much will a profit maximizing monopolist choose to produce? What price will they charge? Compute firm profits at this level of output.

d) What would happen if the monopolist produced one more unit? What would the cost of producing the next unit be?  How much could the monopolist sell the next unit for? Why won’t the monopolist generate this next unit?

e) Is the monopoly outcome proficient? Are there some units that pass a cost benefit test which aren’t being produced?  Show the dead-weight loss on your graph.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M9204

Have any Question? 


Related Questions in Microeconomics

Three paragarphs economicswrite 3 paragraphs answering the

Three paragarphs Economics Write 3 paragraphs answering the following questions: 1. How does each of the following relate to the financial crisis of 2007-2008: declines in real estate values, sub-prime mortgage loans, an ...

Assignment land restoration proposalpart 1please see

Assignment: Land Restoration Proposal Part 1 Please see attachment for part 1 and only complete highlighted section for this assignment. Your team has been given the land rights to a 100-acre abandoned parcel of land. Th ...

Short-run economic fluctuationsplease have by 800 pm west

Short-Run Economic Fluctuations Please have by 8:00 pm west coast time cailfornia time 12/13/2016. Plagrism free, orignal work, and refs. APA format double space. please ask questions right away please dont wait to the l ...

Assignmentselect and review an inspection report posted on

Assignment Select and review an inspection report posted on the OSHA website. The inspection reports can be searched by industry group or establishment name by accessing the reports through the OSHA's Statistics & Data P ...

Assignmentthere is the widespread notion that economists

Assignment There is the widespread notion that economists rarely agree with each other. This seems perplexing when we note also that economics is often called the "Queen of the Social Sciences" (meaning that it is the mo ...

Fiscal policy modulewhich has a larger effect on aggregate

Fiscal Policy Module Which has a larger effect on aggregate demand: an increase in government expenditure or an equal-sized decrease in taxes? Explain your answer. To eliminate a recessionary gap, which fiscal policy sho ...

Economic choice and economic decision makingconsider your

ECONOMIC CHOICE AND ECONOMIC DECISION MAKING Consider your last vehicle purchase and the decision making process you engaged in while deciding what vehicle to purchase or if a new vehicle was the right decision. While an ...

Microeconomics assignmentdiscussion forumnote the video has

Microeconomics Assignment DISCUSSION Forum Note: The video has Closed Captioning. To activate it, start the video, mouse over the bottom of the video and click on the CC icon, then select from the menu. This week's discu ...

Application evaluation of research resultsno research

Application: Evaluation of Research Results No research project or study is perfect. Studies that contain errors can produce unreliable or misleading results. As a consumer of research, you must be able to determine the ...

Topic minimum wage workers who actually are minimum wage

Topic: Minimum wage workers _ Who actually are minimum wage workers? _ What are the profites of raising minimum wage? _ What are the con's of raising minimum wage? _ What in your opinion should we do about minimum wage?

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen