Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

problem1

A firm with market power has estimated the subsequent demand function for its product:

Q = 12,000 – 4,000 P

Where P = price per unit and Q = quantity demanded per year.

The firm’s total costs are $4,000 when nothing is being produced. These costs raise by 50 cents for each unit produced.                       

a) prepare an equation for the firm’s total cost function

b) prepare an equation for the firm’s marginal cost function

c) prepare an equation for firm’s total revenue function (in terms of Q)

d) prepare an equation for the firm’s marginal revenue function (in terms of Q)

e) Assume the firm’s goal is to maximize profit, and determine

• The quantity of output it should produce

• The price it must charge

• The annual profit it will make

f) Given the price find outd in (e), what is the markup over AVC?

g) Compute the price elasticity of demand at the price-quantity combination determined in part (e), and uses it to determine the profit-maximizing markup. Compare with the markup find outd in (f). Do you find the result of the comparison surprising? Why or why not?

h) Elucidate whether the firm will make economic profit

• In the short run

• In the long run.

When answering the economic profit problem, clearly specify your assumptions and demonstrate with a diagram.

problem2

A monopoly firm faces a demand curve P = 120 – Q. The monopolist’s marginal cost curve (MC) is constant at MC = $4.

a) Determine the non-discriminating monopolist’s profit-maximizing quantity and price
(Recall that the MR curves has the same intercept as the demand curve, but twice slopes).

b) Now suppose the monopolist practices first-degree (perfect) price discrimination, that is, is capable to charge a different price to each customer. What is the quantity sold under this policy? What is the price charged for the last unit just sold?

c) Which of two pricing strategies (single price vs. perfect price discrimination) results in greater social welfare (measured by the sum of the consumer and producer surplus)?

d) Which of two pricing strategies results in greater consumer surplus?

e) How does the choice of pricing strategy affect allocate efficiency in economy?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91586

Have any Question? 


Related Questions in Microeconomics

Assignmenta computerworld investigation reported that

Assignment A Computerworld investigation reported that delays in overhauling the federal tax system have cost the U.S. government approximately $50 billion a year in uncollected taxes. Although the IRS has spent hundreds ...

Assignmentin this assignment you must break a norm this

Assignment In this assignment, you must break a norm. This breach must be done in a public forum. You will be writing an essay about your experiment, in which you must be sure to answer all of the questions listed in thi ...

Create the demand and supply of the labor market and demand

Create the demand and supply of the labor market and demand and supply of the goods market using the production function and consumption utility function given. Solving the equations and graphing the models have to be th ...

Great depression economy paperwritten assignmentplease

Great depression , economy paper Written Assignment Please provide a comprehensive answer to the following two questions: 1) Which were the main causes of the Great Depression? 2) Why did the Great Depression last so lon ...

Assignment1in your own words please define describe and use

Assignment 1. IN YOUR OWN WORDS, please define, describe and use an example for the following term (see below). The term (including example) should be no more than 50 words.The following rubric is used to assess each ter ...

Assignmentscenario summarya kansas city based supplier of

Assignment Scenario Summary A Kansas City based supplier of health care information technology (HCIT) solutions has recently hired you as a Human Resource Manager. You are in charge of hiring new medical consultants for ...

Microeconomicswatch this 30 mins youtube link on how the

Microeconomics Watch this 30 mins. YouTube link on 'How The Economic Machine Works' You will enjoy it! https://youtu.be/PHe0bXAIuk0 Write down your understanding of 'How The Economic Machine Works' and make sure to suppo ...

1 this question is for discussion in teamsas the semester

1. This question is for discussion in teams. As the semester progresses. we will discuss these issues in class. Visit The World Factbook at https://www.cia.govlibrarypublications:The-world-factbook'. In "Please select a ...

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 ...

Mcdonalds and the hindu culturein many ways mcdonalds

McDonald's and the Hindu Culture In many ways, McDonald's Corporation has written the book on global expansion. Every day, on average, somewhere around the world 4.2 new McDonald's restaurants are opened. By 2003, the co ...

  • 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