4. Suppose the market demand and supply functions are QD = 180 – 1.5P and QS...

4. Suppose the market demand and supply functions are QD = 180 – 1.5P and QS = 3.5P + 40. You have just graduated and moved to this city; as a new MBA and an entrepreneur, you are considering entering the market for this product.

a. Determine the equilibrium price and quantity in this market.

b. You’ve researched and found that most firms in the market currently experience costs such that TC = 15 + 45Q – 10Q2 + 1.5Q3. Determine whether or not you should enter this market. Use graphs to support your answer.

c. Due to unforeseen delays, you don’t enter the market. However, a year later the market supply has changed to QS = 3.5P + 10. Are you surprised at this shift in supply?

d. Given the new supply conditions, determine whether or not you should enter the market.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Consider the following market demand and supply functions: Qd = 14 - p Qs = -6...

Consider the following market demand and supply functions: Qd = 14 - p Qs = -6 + p a) Calculate the perfectly competitive equilibrium price, quantity, consumer surplus, producer surplus, and total surplus. b) If an output tax t = 2 is imposed on consumers, calculate the new price, quantity, consumer surplus, producer surplus, and total surplus. What is the deadweight loss? Total taxes collected? (Note: an output tax shifts the demand curve intercept downward by the amount of the...

Market Regulation Using the supply and demand functions qD = 12 - 3p qS = -3...

Market Regulation Using the supply and demand functions qD = 12 - 3p qS = -3 + 2p suppose a price ceiling of p = 2 were implemented. a) How much is supplied to the market and how much is demanded? b) What is the excess demand? c) Calculate the consumer surplus, producer surplus, and welfare level without the price ceiling. d) Calculate the consumer surplus, producer surplus, welfare level, and dead weight loss with this price ceiling. e) What...

Suppose that a market has the following demand and supply functions (normal) : Qd=10-p and Qs=2P-2...

Suppose that a market has the following demand and supply functions (normal) : Qd=10-p and Qs=2P-2 Graph the demand and supply 1. what is the equilibrium price 2. what is the equilibrium quantity 3. what is total surplus at this equilibrium 4. If the government imposed a $3/unit excise tax on producers in this market, what would be the new price that consumers pay? 5. If the government imposed a $3/unit excise tax on producers in this market, what would...

Suppose the market demand is QD = 200−P and market supply is QS = 4P−100. A....

Suppose the market demand is QD = 200−P and market supply is QS = 4P−100. A. Suppose the government imposes a tax of t = 5 on producers. What is the incidence of the tax on consumers? Producers? B. What is the deadweight loss of the tax?

Suppose that the market demand and supply for milk is given by Qd =120−6P and Qs...

Suppose that the market demand and supply for milk is given by Qd =120−6P and Qs = 12P − 60 a. Find the market equilibrium quantity, and the equilibrium price. (5 points) b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus (or shortage) if a price floor of $8 is imposed in this market. (5 points) c. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus (or shortage) if a price...

Suppose the market demand and supply functions are Qd= 32,000-20P and Qs=30P+750. You have just graduated...

Suppose the market demand and supply functions are Qd= 32,000-20P and Qs=30P+750. You have just graduated and moved to this city; as a new MBA and an entrepreneur, you are considering entering the market for this product. a. Determine the equilibrium price and quantity in this market. b. TC=5000+1000Q-12Q^2+0.08Q^3. Determine whether or not you should enter this market. c. Due to unforeseen delays, you don’t enter the market. However, a year later the market supply has changed to Qs=30P+1500. Are...

Suppose market demand and supply are given by Qd= 400-12P and Qs= -20 + 8P. If...

Suppose market demand and supply are given by Qd= 400-12P and Qs= -20 + 8P. If a price floor of $20.00 is imposed, there will be a surplus of 10 units. there will be neither a surplus or shortage. there will be a shortage of 16 units. None of the above choices makes any sense in this case.

Consider the following supply and demand functions qD = 16 - 4p qS = -2 +...

Consider the following supply and demand functions qD = 16 - 4p qS = -2 + 5p Market Regulation Using the supply and demand functions from problem 1, suppose a price ceiling of p = 1 were implemented. a) How much is supplied to the market and how much is demanded? b) What is the excess demand? c) Calculate the consumer surplus, producer surplus, and welfare level without the price ceiling. d) Calculate the consumer surplus, producer surplus, welfare level,...

Market demand is given as Qd = 200 – P. Market supply is given as Qs...

Market demand is given as Qd = 200 – P. Market supply is given as Qs = 4P. a. Calculate equilibrium price and quantity a. If an excise tax of $4 per unit is imposed on sellers, calculate the price consumers pay Pc and the price sellers receive Ps. c. Also, calculate the dead weight loss and consumer surplus after the tax.

Market demand is given as QD = 50 – 2P. Market supply is given as QS...

Market demand is given as QD = 50 – 2P. Market supply is given as QS = 3P + 10. Each identical firm has MC = 2.5Q and ATC = 2Q. a. What quantity of output will a single firm produce? What is the price? b. Calculate each firm’s profit? What will happen to it in the long-run? Explain the process. c. Draw the individual demand, MR, supply and ATC curves. Show profit in the diagram

Subjects