Question
In: Economics
3. Consider the following information on the production of basketballs. Demand: P = 10 – Q;...
3. Consider the following information on the production of basketballs. Demand: P = 10 – Q; Marginal Revenue = 10 – 2Q; Marginal Cost = 1 + Q. a. Graph Demand, Marginal Cost, and Marginal Revenue on the same chart. b. In a competitive market, what would the price and quantity be? c. Now assume this is a monopolistic market. What quantity will the monopolist produce? How much will it charge? Is the monopolist producing too much or too little relative to the competitive market? d. Again, assume this is a monopolistic market. Calculate the deadweight loss to society (Hint: the area of a triangle is 0.5*B*H, where B = the base of the triangle and H = the height of the triangle).
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Consider the following information on the production of basketballs. Demand: P = 10 – Q; Marginal...
Consider the following information on the production of
basketballs. Demand: P = 10 – Q; Marginal Revenue = 10 – 2Q;
Marginal Cost = 1 + Q. In a competitive market, what would the
price and quantity be? Now assume this is a monopolistic market.
What quantity will the monopolist produce? How much will it charge?
Again, assume this is a monopolistic market. Calculate the
deadweight loss to society (Hint: the area of a triangle is
0.5*B*H, where B =...
Consider the following supply and demand equations: Supply: p = 10 + q Demand: p =...
Consider the following supply and demand equations:
Supply: p = 10 + q
Demand: p = 100 − 2q
Show your work as your respond to the following
questions.1
(a) What is the market equilibrium price and quantity?
(5%)
(b) What is the Total Surplus at equilibrium? (5%)
(c) The government enacts a price ceiling at ¯p = 50. What is
the Total Surplus?
D）Calculate the Consumer Surplus under a price ceiling of ¯p =
20.
(e) What is the...
Consider the following supply and demand equations: Supply: p = 10 + q Demand: p =...
Consider the following supply and demand equations: Supply: p =
10 + q Demand: p = 100 − 2q Show your work as your respond to the
following questions.
(a) What is the market equilibrium price and quantity?
(b) What is the Total Surplus at equilibrium?
(c) The government enacts a price ceiling at ¯p = 50. What is
the Total Surplus?
(d) Calculate the Consumer Surplus under a price ceiling of ¯p =
20.
(e) What is the Deadweight...
Consider the following supply and demand equations: Supply: p = 10 + q Demand: p =...
Consider the following supply and demand equations:
Supply: p = 10 + q
Demand: p = 100 − 2q
Show your work as your respond to the following questions.1
(a) What is the market equilibrium price and quantity? (5%)
(b) What is the Total Surplus at equilibrium? (5%)
(c) The government enacts a price ceiling at ¯p = 50. What is
the Total Surplus?
D）Calculate the Consumer Surplus under a price ceiling of ¯p =
20.
(e) What is the...
Consider the following supply and demand equations: Supply: p = 10 + q Demand: p =...
Consider the following supply and demand equations: Supply: p =
10 + q Demand: p = 100 − 2q Show your work as your respond to the
following questions.
(a) What is the market equilibrium price and quantity?
(b) What is the Total Surplus at equilibrium?
(c) The government enacts a price ceiling at ¯p = 50. What is
the Total Surplus?
(d) Calculate the Consumer Surplus under a price ceiling of ¯p =
20.
(e) What is the Deadweight...
Consider the following supply and demand equations: Supply: p = 10 + q Demand: p =...
Consider the following supply and demand equations:
Supply: p = 10 +
q
Demand: p = 100 −
2q
Show your work as you respond to the
following questions.
What are the market equilibrium price and quantity?
(5%)
What is the Total Surplus at equilibrium?
(5%)
The government enacts a price ceiling at ¯p =
50. What is the Total Surplus? (5%)
Calculate the Consumer Surplus under a price ceiling of
¯p = 20. (5%)
What is the Deadweight Loss...
Suppose that the market demand curve is given by q=10-p and that production costs are zero...
Suppose that the market demand curve is given by q=10-p and that
production costs are zero for each of four oligopolists. (a)
Determine the level of output for each of the four oligopolists
according to the Cournot model. (b) What general rule can you
deduce from your answer to part (a)?
Consider an industry with demand Q = a − p where 3 identical firms that compete...
Consider an industry with demand Q = a − p where 3 identical
firms that compete a la
Cournot. Each firm’s cost function is given by C = F + c q. Suppose
two of the firms merge and that the
merged firm’s cost function is given by C = F'+C'q, where
F<F'<2F
(a) Determine each firm’s market share before and after the
merger.
(b) Suppose that a = 10 and c = 3. Determine the Herfindahl index
after the...
Consider a closed market with the following domestic demand and supply functions: P=540- (3/4)Q P=120+3Q (a)...
Consider a closed market with the following domestic demand and
supply functions:
P=540- (3/4)Q
P=120+3Q
(a) (4 points) What is the domestic equilibrium price and
quantity?
(b) (4 points) Calculate the consumer surplus and the producer
surplus.
(c) (6 points) Suppose that the domestic market opens up and it
joins the world market. If the world price is $126 less than the
old domestic equilibrium price, how much quantity is produced
domestically? How much quantity is imported?
(d) (6 points)...
Consider the following inverse demand function, p(Q) = a-bQ, Q = q1 +q2, where a and...
Consider the following inverse demand function, p(Q) = a-bQ, Q =
q1 +q2, where a and b are positive parameters and qi
denotes firm i's output, i = 1, 2. Assume that the total cost of
firm i is cqi2/2, with c > 0. Firms choose
quantities simultaneously and non cooperatively (Cournot
competition). The Cournot game described above is infinitely
repeated. Firms use grim trigger strategies (infinite Nash
reversion). Firms discount future profits at a rate r > 0.
a)...
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