Question
In: Economics
**The demand function for product is p=-8q+800 and the total cost per unit for producing q...
**The demand function for product is p=-8q+800 and the total cost per unit for producing q units is c=67q+80+(1000/q)
-Develop the total revenue, total cost (if not given), and profit functions. Explain these functions in few sentences.
-Compute the point elasticity of demand.
-Find the intervals where the demand is inelastic, elastic, and the price for which the demand is unit elastic.
-Find the quantity that maximizes the total revenue and the corresponding price. Interpret your result.
-Find the quantity that minimizes the average cost function and the corresponding price. Interpret your results.
-What are the quantity and the price that maximize the profit? What is the maximum profit? Interpret your result.
-Discuss the results of 6, 7 and 8.
The supply function is given by, p=8+q, find the price and the quantity at the equilibrium.
-Calculate the consumer and producer surplus
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
A firm's total cost of producing Q units of output is C (Q) = 79 + 20Q. The inverse demand curve for the firm's product is P(Q) = 100-Q, where P denotes the price of the product.
A firm's total cost of producing Q units of output is C (Q) =
79 + 20Q. The inverse demand curve for the firm's product is P(Q) =
100-Q, where P denotes the price of the product. a) If the price of
the product is set equal to the firm's marginal cost, what profit
will the firm earn? b) If the firm charges a two-part tariff (a
fixed fee plus a per unit price), how large is the fixed fee? How
large...
The market demand function for a good is given by Q = D(p) = 800 −...
The market demand function for a good is given by Q = D(p) = 800
− 50p. For each firm that produces the good the total cost function
is TC(Q) = 4Q+( Q2/2) . Recall that this means that the marginal
cost is MC(Q) = 4 + Q. Assume that firms are price takers. In the
short run (with 100 firms), and assume that the government imposes
a tax of $3 per unit.
(a) What would be the new equilibrium...
The demand function for iPhone is Q(p) = 100 – P and the cost function is...
The demand function for iPhone is Q(p) = 100 – P and the cost
function is C(Q) = 5Q. Apple initially sets the price of iPhone to
be p1; after one-year Apple lowers the price to p2. Suppose the
price decrease is not anticipated by the consumers. The number of
consumers buying the iPhone at p1 is q1, and the amount buying at
p2 is q2, where q1=Q(p1) and q1+q2=Q(p2). Find the
profit-maximizing p1 and p2 and the corresponding q1...
The demand for a monopolist’s product is: P = 40 -2Q; the monopolist’s total cost function...
The demand for a monopolist’s product is: P = 40 -2Q; the
monopolist’s total cost function is: TC = 8Q + 0.5Q^2.(a)Under free
monopoly, what is the numerical value of the dead-weight loss
(DWL)? (b) Compute the monopolist’s break-even points and graph in
the same diagram, demand (D), marginal revenue (MR), marginal cost
(MC) and average cost (AC); in diagrams directly below, graph total
revenue (TR), total cost (TC) and profit (pi).(c) Under short-run
regulation, what are the market gains?
The demand for a monopolist’s product is: P = 40 -2Q; the monopolist’s total cost function...
The demand for a monopolist’s product is: P = 40 -2Q; the
monopolist’s total cost function is: TC = 8Q + 0.5Q^2.(a)Under free
monopoly, what is the numerical value of the dead-weight loss
(DWL)? (b) Compute the monopolist’s break-even points and graph in
the same diagram, demand (D), marginal revenue (MR), marginal cost
(MC) and average cost (AC); in diagrams directly below, graph total
revenue (TR), total cost (TC) and profit (pi).(c) Under short-run
regulation, what are the market gains?
Suppose that the inverse demand function for a monopolist's product is: p=7-(Q/20) Its cost function is:...
Suppose that the inverse demand function for a monopolist's
product is: p=7-(Q/20)
Its cost function is: C=10+14Q-4Q^2+(2Q^3/3)
Marginal revenue equals marginal cost when output equals: q=_
units and q=_units (Enter numeric responses using real numbers
rounded to three decimalplaces.)
What is the profit maximizing output?
Question 1 Assume that: market demand function for a product is: P= 80−q and marginal cost...
Question 1
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
monopoly allocation, if...
A monopolist has a demand curve given by P = 92 - 8Q and a total cost curve given by TC = 60Q.
A monopolist has a demand curve given by P = 92 - 8Q and a total cost curve given by TC = 60Q.
The associated marginal cost curve is MC = 60. What is the monopolist's marginal revenue curve?
MR = 70 - 8Q
MR = 92 - 16Q
MR = 70 - 8Q
MR = 56 - Q
none of the above
And what is the monopolist's profit maximizing quantity?
2
6
18
9
none of the...
The demand for fabric is Q = 40 - P/2. The private cost of producing fabric...
The demand for fabric is Q = 40 - P/2. The private cost of
producing fabric is C(Q) = Q2, with private marginal cost PMC = 2Q.
Washing and dyeing fabric causes water pollution with total damages
CE(Q) = Q2/2, so external marginal costs of EMC = Q.
Calculate the net benefits under competitive equilibrium and
under efficient equilibrium, as well as the DWL. What can you
conclude from the value of DWL (which equilibrium is the right
level or...
Consider a market with market demand P(Q) = 70 -8Q and each firm in the market...
Consider a market with market demand P(Q) = 70 -8Q and each firm
in the market faces a total cost TC(Q) = 22Q.
Suppose there is only one firm in the
market.
(a) What is the profit-maximizing price and quantity in the
market?
(b) What are the profits and consumer surplus?
Now suppose we have a Cournot duopoly where firms choose
quantities.
(c) What is the equilibrium price and market quantity?
(d) What is the consumer surplus and profits for...
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