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

Then answer the following questionsin the video it is

Then answer the following questions: In the video, it is mentioned that Whirlpool provides three different types of appliances that vary in the amount of features that are offered. Discuss the product differentiation acr ...

Assignmentquestion a daoism amp confucianism as fisher

Assignment Question A: DAOISM & CONFUCIANISM. As Fisher states in our textbook, "Individuals often harmonize the apparently opposite characteristics of Daoism and Confucianism in their own lives." In what specific ways m ...

Milestone projectmilestone one propose organization for

Milestone Project Milestone One: Propose Organization for Analysis In Module Three, you will select the organization you would like to analyze in part two of the final project using the U.S. Securities and Exchange Commi ...

Economics assignment1 multiple product pricinganswer the

Economics Assignment 1. Multiple Product Pricing: Answer the following about the pricing of multiple products: a. Icarus Medical Supplies produces adhesives that are used to reassemble broken bones. Pindrop Medical Produ ...

Article analysisplease choose an article from the wall

Article Analysis Please choose an article from the Wall Street Joumal, The Economist, Bureau of Labor/Statistics, Bureau of Economic Analysis etc... or any peer reviewed article for the UOP library. Select one subjects f ...

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 ...

New jersey human servicesassignment evaluation of the

NEW JERSEY HUMAN SERVICES Assignment: Evaluation of the Agency's Budgeting and Cumulative Report As a consultant, you need to develop an in-depth analysis and evaluation of the selected agency's budgeting and then provid ...

Introduction to economic evaluation of health promotion

Introduction to Economic Evaluation of Health Promotion Interventions Assignment Evaluating Cost-effectiveness using Markov cohort models: The HPV case The goal of this assignment is to provide students with applied prac ...

Assignmentwhat are the most important knowledge assets at

Assignment What are the most important knowledge assets at Dirt Bikes? What functions and employee positions are responsible for creating, distributing, and using these knowledge assets? Are all of these assets explicit ...

Questionsexercisesseminar 11nbsp discuss what you

Questions/Exercises Seminar 1 1.  Discuss what you understand by the following: a) the law of demand b) the conditions of demand c) a demand curve d) a normal good e) an inferior good f) a Giffen good G) the law of suppl ...

  • 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