1. Consider the following demand curve: (20 points) P = 60 – 0.25Qd a. Plot a...

1. Consider the following demand curve: (20 points) P = 60 – 0.25Qd a. Plot a graph of this demand curve. b. What is the price elasticity of demand at $45? c. What is the price elasticity of demand at $30? d. What is the price elasticity of demand at $15? e. From all the answers from this question, what can you infer about elasticity and linear demand curve?

Expert Solution

Rahul Sunny answered 2 years ago

Consider a country with the following aggregate demand curve for cars.Q = 2000 – 20.P There...

Consider a country with the following aggregate demand curve for cars.Q = 2000 – 20.P There is a industry with following marginal and average cost curves. MC = 10 + 0.01 QAC = 10 + 0.005Q Assume that the industry is a monopoly and there is no free trade. a. What is the monopolist’s marginal revenue curve? (Hint: Express demand curve as P = A – B.Q form, and estimate MR) b. What is the monopolist’s profit maximizing output? c....

Suppose the Demand and supply curve for a particular product is as follows: D(p)=60-5p S(p)=5p+20 Suppose...

Suppose the Demand and supply curve for a particular product is as follows: D(p)=60-5p S(p)=5p+20 Suppose city council considers implementing a small lump sum tax of $T per unit traded (i.e. if the consumer pays p then the producer receives p-T). Question: What is the tax incidence on consumers? Hint 2: The derivative of demand and supply with respect to price is just the slope of the curves, in this case -5, and 5 respectively.

Given the demand curve for a monopolist: Qd= 60 -2 P and the marginal revenue curve:...

Given the demand curve for a monopolist: Qd= 60 -2 P and the marginal revenue curve: MR = 30 -Q. Marginal cost equals average cost at $14. What is the price and quantity that the profit-maximizing monopolist will produce? Graph these curves andlabel theequilibrium points. b) Ifthis were a competitive industry, what price and quantity would be produced? Show this on the above graphand show your work (answers) below. c) What is the monopolist's profit? What is the consumer surplus...

Consider a market with a perfectly elastic demand curve at p∗ = 1, 763 and a...

Consider a market with a perfectly elastic demand curve at p∗ = 1, 763 and a perfectly inelastic supply curve at q∗ = 452. What is the Consumer Surplus? What is the Producer Surplus?

#1) Consider a market with demand curve given by P = 90 - Q . The...

#1) Consider a market with demand curve given by P = 90 - Q . The total cost of production for one firm is given by TC(q) = (q2/2)+10 . The marginal cost of production is MC = q . a) If the market is perfectly competitive, find the supply curve for one firm. Explain. b) If the market price was $10, how many perfectly competitive firms are in the industry if they are identical? Explain. c) Find an expression...

For a demand curve P = 60 – 0.5Q, find the elasticity at P = 10. If the demand curve shifts parallel to the right, what happens to the elasticity at P = 10?

The market demand curve for a pair of Cournot duopolists is given as: P = 60...

The market demand curve for a pair of Cournot duopolists is given as: P = 60 – 3Q. The constant per unit marginal cost is $6/unit for each duopolist. (Round your answers to two decimal points) a) Find the Cournot equilibrium price, quantity, and profits b) Solve the same problem as a Bertrand equilibrium. Find the longrun equilibrium price, quantities, and profits. c) Solve the same problem as a Stakelberg Leader-Follower equilibrium. Assume Firm 1 is the leader.

1. Consider a closed economy. Let the demand curve be P = 80 - Q and...

1. Consider a closed economy. Let the demand curve be P = 80 - Q and the supply curve be P = 20 + 2Q a) Calculate the equilibrium price and equilibrium quantity. b) Suppose the government sets a price ceiling of $55, what is the amount of excess demand or excess supply? (Write down excess demand or excess supply). c) Suppose the government sets a production quota of 16 units, calculate the equilibrium price and equilibrium quantity. 2. Consider...

The inverse demand curve for a product using resource X is given by P = 60...

The inverse demand curve for a product using resource X is given by P = 60 – 0.2Q and the cost of production is constant at MC = 10 1. Find the static equilibrium for this product (recall at equilibrium Supply equates Demand and in this case Supply = Marginal Cost) (call this t0). 2. Draw the static equilibrium. 3. What is the value of consumer surplus from consumption in t0? (recall, this is simply the area under the demand...

A firm in monopolistic competition has the firm demand curve: P = 60 - 2Q. The...

A firm in monopolistic competition has the firm demand curve: P = 60 - 2Q. The Total Cost equation is TC = 40 + Q2 How much deadweight loss is created by the firm? Enter as a value.

Question