Question
In: Economics
Suppose that the market demand for expensive steak dinners is given by: Q = 1,000−10P, so...
Suppose that the market demand for expensive steak dinners is given by:
Q = 1,000−10P,
so that the marginal revenue is:
MR = 100−0.2Q,
where Q is the number of steak dinners per day and P is the price of a dinner. The marginal cost and average total cost are both constant and equal to $40 per dinner.
Suppose that there is only one firm in the market.
Suppose that a second firm that produces identical steaks and has identical costs enters the market and acts according to the Cournot oligopoly model.
The equilibrium price is?
The total equilibrium quantity is how many dinners?
Each firm's economic profit is?
Solutions
Rahul Sunny answered 7 months agoRelated Solutions
Suppose that the market demand for expensive steak dinners is given by: Q = 1,000−10P, so...
Suppose that the market demand for expensive steak dinners is
given by:
Q = 1,000−10P,
so that the marginal revenue is:
MR = 100−0.2Q,
where Q is the number of steak dinners per day and P is the
price of a dinner. The marginal cost and average total cost are
both constant and equal to $40 per dinner.
Suppose that there is only one firm in the market.
The quantity that the firm produces will be how many
dinners?
The...
Suppose that the demand curve for wheat is Q= 120-10p and the supply curve is Q=10p...
Suppose that the demand curve for wheat is
Q= 120-10p
and the supply curve is
Q=10p
The government imposes a price ceiling p =$ 3 per unit.
a. How do the equilibrium price and quantity change? (round
quantities to the nearest integer and round prices to the nearest
penny)
The equilibrium quantity without the price ceiling is 60 and the
price without the price ceiling is $6.
The equilibrium quantity with the price ceiling is 30.
b. What effect does...
The demand function for a good is given as Q = 130-10P.
The demand function for a good is given as Q = 130-10P. Fixed costs associated with producing that good are €60 and each unit produced costs an extra €4.
i). Obtain an expression for total revenue and total costs in terms of Q
ii). For what values of Q does the firm break even
iii). Obtain an expression for profit in terms of Q and sketch its graph
iv). Use the graph to confirm your answer to (ii) and to...
Suppose the demand curve for aluminum is Q = 800 – 10P, where P is the...
Suppose the demand curve for aluminum is Q = 800 – 10P, where P
is the price per unit of aluminum and Q measures millions of units
of aluminum. The private marginal cost of producing aluminum is MC
= Q + 20, while the external marginal cost of producing aluminum is
$10.
Find the equilibrium price and quantity when the firm ignores
the cost of the externality;
Find the equilibrium price and quantity when the cost of the
externality is...
Calculation: suppose the demand and supply for cola is Q D = 15 – 10P and...
Calculation: suppose the demand and supply for cola is Q D = 15
– 10P and Q S = 40P – 50. The current equilibrium is $1.30 and 2
million bottles. a. Calculate the share of a tax that will be borne
by consumers and the share borne by producers b. If a tax of $0.15
per bottle is created, what do buyers now pay for a bottle? What
will sellers receive?
Suppose the demand curve for beer is given by QD = 50 − 10P and the...
Suppose the demand curve for beer is given by QD = 50 − 10P and
the supply curve for beer is given by QS= −10 +20P. Now, the
government imposes a price ceiling of $1 in the market for beer. As
a result, the producer surplus decreases. Now, a part of the
initial producer surplus is part of the deadweight loss and a part
of it is transferred to consumers.
a) What is the amount of producer surplus that is...
Suppose that the market demand is: P = 10 – Q, so that marginal revenue is:...
Suppose that the market demand is: P = 10 – Q, so that marginal
revenue is: MR = 10 – 2Q.
The marginal cost is: MC = 4 and average cost is: AC = 4.
a. If the market structure is monopoly, determine the profit
maximizing price and output for
this monopolist and calculate its economic profit or loss at the
profit maximizing output.
b. If the market structure is perfect competition, determine the
profit maximizing price and
total output...
The demand function for some product is given by Q = 100-10p. It costs $1 to...
The demand function for some product is given by Q = 100-10p. It
costs $1 to produce one unit of this good and fixed costs of
production are zero.
(a) Calculate equilibrium prices and industry output for two
market structures: when this market is supplied by a large number
of perfectly competitive firms and by a monopolist.
b) Now suppose that there are only two firms in this industry
which compete in quantities. State the profit-maximization problem
of each firm...
Suppose the market demand for broccoli is given by Demand: Q = 1000 – 5P Where...
Suppose the market demand for broccoli is given by
Demand: Q = 1000 – 5P
Where Q is quantity measured
in 100s of bushels and P is price per hundred bushels. The
market supply is given by
Supply: Q = 4P – 80
What is the equilibrium price and quantity? How much is spent
on broccoli? What is consumer and producer surplus?
Describe the impact of a $150 per hundred bushel price floor on
broccoli. (How many bushels would be...
Consider an industry with market demand Q=550-2p and market supply Q=100+10p. Determine the equilibrium price and...
Consider an industry with market demand Q=550-2p and market
supply Q=100+10p. Determine the equilibrium price and quantity.
Suppose the govrenment imposes a tax of $6 per unit to be paid by
consumers. What is the impact on equilibrium price and quantity?
What if the sales tax is paid by the seller instead of the
buyer?
Suppose that demand is instead given by Q=280-2p.
a) Show that the equilibrium levels of p and q are the same as
in the initial...
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