ECON-1010-D1/D2-Introduction to Microeconomics
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MATCHING DEFINITION
The excess of the benefit
received from a good over the amount paid for it. It is calculated as the
marginal benefit (or value) of a good minus its price, summed over the quantity
bought.
MATCHING DEFINITION
An exclusive right granted
to the inventor of a product or service.
MATCHING DEFINITION
The excess of the amount
received from the sale of a good or service over the cost of producing it. It
is calculated as the price of a good minus the marginal cost (or minimum
supply-price), summed over the quantity sold.
Use the figure to answer the following six questions about a firm in monopolistic competition.
To maximize economic profit, this firm produces units per week.
To maximize economic profit, this firm will charge a price of $ per unit.
At the profit-maximizing output level, the firm makes an economic profit of $ .
At the profit-maximizing output level, the firm's markup is $ per unit.
If the firm produced the efficient quantity, it would produce units per week.
At the profit-maximizing output level, the firm has excess capacity of units per week.
Use the figure to answer the following six questions about Smart Dagi Inc., a firm in monopolistic competition that produces calculators.
To maximize economic profit, this firm produces calculators per day.
To maximize economic profit, this firm will charge a price of $ per calculator.
At the profit-maximizing output level, the firm makes an economic profit of $ .
At the profit-maximizing output level, the firm's markup is $ per calculator.
If the firm produced the efficient quantity, it would produce calculators per day.
At the profit-maximizing output level, the firm has excess capacity of calculators per day.
.
2) The four-firm concentration ratio for pizza sellers is %.
The figure above shows demand and marginal revenue for a single price monopoly.
At any price above $ demand is elastic.
Assume production costs are constant and equal to $12.00 (i.e., AC = MC = $12).
Output is units per day at a price of $ per unit.
Profit is $ .
Consumer surplus is $ .
If this market was perfectly competitive , output would exceed the single-price monopoly output by
If this is a perfectly price discriminating monopoly at a constant cost equal to $6.00 - the lowest price charged per unit is $ . - the number of units sold is . - total revenue is $ .
Use the figure to answer to answer the following 5 questions.
The figure above shows the demand and cost curves facing a price-setting firm.
The profit-maximizing (or loss-minimizing) level of output is .
In profit-maximizing (or loss-minimizing) equilibrium, the price-setting firm earns$ in total revenue, which is than the maximum possible total revenue of $ .
In short run the maximum profit the firm can earn is $ .
.
2) At this level of output the firm earns a profit of $.
3) At the profit maximizing level of output the last unit produced and sold adds $ to revenue and $to cost.
4) One more unit of output beyond the profit-maximizing level would add $ to revenue and $ to cost, thereby profit by $ ..
2) If the firm earns profits of $290 by producing 65 units of output, the firm has Total Costs of .Want instant access to all verified answers on moodle.uleth.ca?
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