ECON-1010-D1/D2-Introduction to Microeconomics
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Use the figure to answer to answer the following 4 questions.
The figure shows the demand and cost curves facing a firm with market power in the short run.
The profit-maximizing (or loss-minimizing) level of output is units.
The firm will sell its output at a price of $ .
The firm earns profits of $ .
When in short-run equilibrium, if the firm sells another unit of output total revenue will by $ .
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.
A firm with market power faces the following estimated demand, marginal cost and total cost functions:
Qd = 94 000 – 500P + 0.4M – 4000PR
MC = 38 + 0.001Q
TC = 3 000 + 21Q
where Qd is quantity demanded, P is price, M is income, and PR is the price of a related good.
The firm expects income to be $50 000 and PR to be $10.
The Inverse Demand Function is P = – Q
The Marginal Revenue Function is MR = – Q
The profit-maximizing choice of output is units.
The profit-maximizing price is $ .
The firm's profit is $ .
Please answer all parts of the question.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 $15.00 (i.e., AC = MC = $15.00).
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 $7.50 - the lowest price charged per unit is $ . - the number of units sold is . - total revenue is $ . - consumer surplus 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 $250 by producing 40 units of output, the firm has Total Costs of .Use the figure to answer to answer the following 4 questions.
The figure shows the demand and cost curves facing a firm with market power in the short run.
The profit-maximizing (or loss-minimizing) level of output is units.
The firm will sell its output at a price of $ .
The firm earns profits of $ .
When in short-run equilibrium, if the firm sells another unit of output total revenue will by $ .
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