Question

Please Answer and Explain why.

1. Marginal external costs for producing coal are MCexternal = 8Q while MCinternal = 6Q. The demand function for coal is P = 180 - 4Q. How much is the level of output that is efficient from the community point of view (the socially efficient level of output)? (a) 10, (b) 20, (c) 15, (d) 18, (e) Cannot be determined because of lack of information

2. In the perfect competition market model, companies maximize profits when

1. the difference between MR and MC is maximum
2. MR is greater than price
3. the difference in direction and MC is the minimum
4. the price is not the same as MR = MC
5. There is no right answer

3. When the minimum total cost (ATC) is minimum:

1. AVC rises as output increases
2. AVC plus AFC decreases with increasing output
3. ATC = AVC
4. MC = ATC
5. correct answers (a) and (d)

5. For monopolists: (a) always set a price greater than MR, (b) can get a bigger profit (above the "normal rate of return") in the long term, (c) can increase prices without having to reduce the amount production because he is the only supplier in the market, (d) answers (a) and (b) are correct, (e) the answers are all correct.

6. In industrial analysis, R and D is one of the company's variables in (a) structure, (b) conduct, (c) performance, (d) environment, (e) nothing is true.

7. It is known that the demand function of an industry is Qd = 500 - 2P. When the market price in the industry is $ 50 per unit, what is the total demand? If it is assumed in industry there are 4 companies with the same market share, then how big is the IHH?

(a) Requests for 225 units and IHH of 1600

(b) Requests for 400 units and IHH of 2500

(c) Requests for 225 units and IHH of 3333.33

(d) Request for 400 units and IHH of 10000

(e) Demand of 400 units and IHH is 0 because of the market share of each

Each company is 0.

8. Suppose that the market for goods X has a CR-4 of 0.75. Assume that the industry's total sales are $ 2 million. Based on the information available, we know that the sales size of the 4 largest companies is (a) $ 1 500 000, (b) $ 1 050 000, (c) $ 500 000, (d) $ 750 000 and (e) All wrong answers.

9. Suppose that the monopolist has an inverse curve of demand for the product it produces P = 200 - 5Q. Based on this information, the marginal revenue function is

(a) MR (Q) = 400 - 2.5Q, (b) MR (Q) = 400 - 10Q, (c) MR (Q) = 200 - 5Q, (d) MR (Q) = 200 - 2.5Q, (e) There is no right answer.

10. Suppose that in a perfectly competitive market, the demand function and supply function are respectively P = 100 - 5Q and P = 10 + 5Q. Based on this information, the individual demand curve faced by a company operating in this market is (a) P = 100 - 5Q, (b) horizontal line of $ 9, (c) horizontal line of $ 55, (d) P / N = (100 - 5Q) / N, where N is the total number of companies operating in the perfect competition market, (e) There is no right answer.

Answer 1