Question
In: Economics
Suppose the market demand function for a normal product is ? = ?? − ?, and...
Suppose the market demand function for a normal product is ? = ?? − ?, and the marginal cost of producing it is ?? = ?? , where, ? is the price of the product and ? is the quantity demanded and/ supplied.
a. Draw the demand curve and the marginal cost curve using price and marginal cost measure in vertical axis and quantity demanded and/ or supplied in horizontal axis.
b. How much would be equilibrium price and quantity supplied in the competitive market?
c. Calculate the consumer surplus, producer surplus and total surplus in competitive market structure.
d. Find the marginal revenue function of the product and the marginal revenue curve in the diagram drawn in part a.
e. How much would be equilibrium price and quantity supplied in the monopoly market?
f. Calculate the consumer surplus, producer surplus and total surplus in monopoly market structure.
g. Show that monopoly market allocation reduces social welfare compared to competitive market allocation.
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Suppose the market demand function for a normal product is ? = ?? − ?, and...
Suppose the market demand function for a normal product is ? =
?? − ?, and the marginal cost of producing it is ?? = ?? , where, ?
is the price of the product and ? is the quantity demanded and/
supplied.
a. Draw the demand curve and the marginal cost curve using price
and marginal cost measure in vertical axis and quantity demanded
and/ or supplied in horizontal axis.
b. Find the marginal revenue function of the product...
Suppose that demand for pizza at chuck cheese can be expressed by the (normal) demand function:...
Suppose that demand for pizza at chuck cheese can be expressed
by the (normal) demand function: Q = 10 - P. Further suppose that
the (normal) supply function can be expressed: Q = 2P - 2.
Graph this situation.
1.What is the initial equilibrium price?
2.What is the initial equilibrium quantity?
3.Suppose that a tax of $3/pizza is levied on chuckie cheese
(the producer).What will be the new price paid by consumers after
the tax?
4. What will be the...
Suppose that demand for pizza at chuck cheese can be expressed by the (normal) demand function:...
Suppose that demand for pizza at chuck cheese can be expressed
by the (normal) demand function: Q = 10 - P. Further suppose that
the (normal) supply function can be expressed: Q = 2P - 2.
Graph this situation.
3.Suppose that a tax of $3/pizza is levied on chuckie cheese
(the producer).What will be the new price paid by consumers after
the tax?
4. What will be the new price received by chuck cheese
(producer) after the tax?
5. What...
The inverse demand function for a product by a company that montizes the market is given...
The inverse demand function for a product by a company that
montizes the market is given by v = 200 - 0.03m and supply is given
by v = 0.05m
a) Draw and calculate market balance (show price & quantity
and a picture)
b)The product damage to society is 70$ per unit. The government
uses Pigovjan tax on the production of the company. Update the
picture from a) in regards to the Pigovjan tax/1b.
Inverse demand function of a product by a company that montizes the market is given by...
Inverse demand function of a product by a company that montizes
the market is given by v = 200 - 0.03m and supply is given by v =
0.05m
1a.. Draw and calculate market balance (show price &
quantity and a picture)
1b..The product damage to society is 70$ per unit. The
government uses Pigovjan tax on the production of the company.
Update the picture from 1.a in regards to the Pigovjan tax/1b.
Suppose the market demand for a commodity is given by the download sloping linear demand function:...
Suppose the market demand for a commodity is given by the
download sloping linear demand function:
P(Q) = 3000 - 6Q
where P is a price and Q is quantity. Furthermore, suppose the
market supply curve is given by the equation:
P(Q) = 4Q
a) Calculate the equilibrium price, quantity, consumer surplus
and producer surplus.
b) Given the equilibrium price calculated above (say's P*),
suppose the government imposes a price floor given by P' > P*.
Pick any such P'...
Suppose the demand function for the product is Qd = 65,800 – 1,200P and the supply...
Suppose the demand function for the product is Qd = 65,800 –
1,200P and the supply function is Qs = 4,000P – 20,000. Suppose
also that there is a price floor of 20 dollars. Using a graph
similar to question 3 and the information provided, what is the
deadweight loss (DWL) in the economy?
A.DWL = $10,500
B. DWL = $9,555
C. DWL = $11,555
D.DWL = $12,000
Assume that: market demand function for a product is: P = 80 − q and marginal...
Assume that: market demand function for a product is: P = 80 − q
and marginal cost (in dollars) of producing it is: MC = 1q, where P
is the price of the product and q is the quantity demanded and/or
supplied. Also assume that the government imposes a price control
at P = $80/3
a) Find the consumer and producer surplus associated with the
price control allocation.
b) How would the price control allocation in (a) differ from the...
2. Suppose the demand function for a monopolist’s product is given by P = 300 –...
2. Suppose the demand function for a monopolist’s product is
given by P = 300 – 3Q and the cost function is given by C = 1500 +
2Q2 (Kindly answer clearly)
A) Calculate the MC.
B) Calculate the MR.
C) Determine the profit-maximizing price.
D) Determine the profit-maximizing quantity.
E) How much profit will the monopolist make?
F) What is the value of the consumer surplus under monopoly?
G) What is the value of the deadweight loss?
I. Suppose the inverse demand function for a monopolist’s product is given by ? = 150...
I. Suppose the inverse demand function for a monopolist’s
product is given by ? = 150 − 2? and the total cost function is
given by ?? = 100 + 30?
1. Determine the profit-maximizing price and quantity
2. Determine the maximum profits
II. Suppose the inverse demand function for a monopolistically
competitive firm’s product is given by
? = 100 − 2?
and the cost function is given by ?? = 52 + 4?
1. Determine the profit-maximizing price...
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