The figure shows the market demand curve for telephone calls. Suppose the marginal cost of a telephone call is 2 cents a minute for a call no matter how many minutes of calls are made and there are 3 firms in the industry. Price and costs (cents per minute) f the firms in the industry operate as perfect competitors, there are minutes of calls made per hour. O A. more than 7 million and less than or equal to 9 million O B. between 0 and 3 million O C. more than 3 million and less than or equal to 5 million O D. more than 5 million and less than or equal to 7 million O E. more than 9 million 3- 2- MR

The figure shows the market demand curve for telephone calls. Suppose the marginal cost of a telephone call is 2 cents a minute for a call no matter how many minutes of calls are made and there are 3 firms in the industry. Price and costs (cents per minute) f the firms in the industry operate as perfect competitors, there are minutes of calls made per hour. O A. more than 7 million and less than or equal to 9 million O B. between 0 and 3 million O C. more than 3 million and less than or equal to 5 million O D. more than 5 million and less than or equal to 7 million O E. more than 9 million 3- 2- MR

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

You own Athleticon, which manufactures athletic wear. Your new contract with Atlanta United, a professional soccer team, allows Athleticon to be the sole suppler of athletic wear with the “Atlanta United” logo. No one lese can manufacture athletic wear with the “Atlanta United” logo. What do you think will be Athleticon’s level of profitability on the sale of “Atlanta United” athletic wear? Explain why. Your contract with Atlanta United only lasts 3 years. It was not renewed. Other firms can now manufacture athletic wear with the “Atlanta United” logo It is now 5 years after your contract with Atlanta United was terminated. Any manufacturer that wants to can manufacture and sell athletic wear with the “Atlanta United” logo. What do you think will be the level of profitability and rate of return on manufacturing athletic wear with the “Atlanta United” logo? Explain why.
Only two firms, Acme and Stuff Inc., sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $10 and zero fixed cost (so MC-ATC=$10). Price Quantity Total Revenues 10 70 65 60 55 50 45 40 28889 35 30 25 20 15 10 15 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 0 If Acme and Stuff Inc are able to collude, how much will Acme produce? 6500 12000 16500 20000 22500 24000 24500 24000 22500 20000 16500 12000 6500 0
8. International price discrimination Le Jouet is a French firm, and it is the only seller of toy trains in France and Russia. Suppose that when the price of toy trains increases, Russian children more readily replace them with toy airplanes than French children. Thus, the demand for toy trains in Russia is more elastic than in France. The following graphs show the demand curves for toy trains in France (DF) and Russia (DR) and marginal revenue curves in France (MRF) and Russia (MRR). Le Jouet's marginal cost of production (MC), depicted as the grey horizontal line in both graphs, is $12, and the resale of toy trains from Russia to France is prohibited. Assume there are no fixed costs in production, so marginal cost equals average total cost (ATC). PRICE (Dollars per toy train) 40 36 32 28 24 20 16 8 4 0 France MC-ATC DF MR₂ TE 02 4 6 8 10 12 14 16 18 20 QUANTITY (Millions of toy trains) ? PRICE (Dollars per toy train) 40 36 32 28 24 20 16 8 4 0 02 Russia MR. DR 4 6 8 10 12 14 16 18 20…
1. Suppose there are two firms who are Cournot duopolists (set quantity simultaneously) in the wine business. The inverse demand for wine is given by P(Q) = 300 – 0.20. One firm has marginal costs of $45 and the other firm has marginal costs of S30. What is the total output produced in the market?
Refer to Figure 1. If the market price is $2, what the firm will do? Enable Editing 4) Use the figure below to answer the following questions. Price and cost (dollars per unit) 80 MC 60 40 ATC 20 MR 20 40 60 80 100 Quantity (units per week) Figure 2 a) Refer to Figure 2 If this firm is in monopolistic competition, what is its output? b) Refer to Figure 2 If this firm is in monopolistic competition, what is the price it will charge? c) Refer to Figure 2. What is the firm profit situation? What time frame equilibrium is the firm? d) Refer to Figure 2. If this firm in monopolistic competition is in short-run equilibrium, and the firm making profit what will happen in the long run to the firm profit? explain
Suppose there are 5 types of consumers: Type A. Type B. Type C. Type D, and Type E. There are 3,000 of each type. Two software products are sold by a monopolist: spreadsheets and word processing. Assume the marginal cost of production is $0. Consumer Type A B C D E Number 3,000 3.000 3,000 3.000 3,000 Spreadsheet 800 300 200 100 0 b. What is profit at this pricing policy? $ Willingness to Pay Word Processor Instructions: Round your answers to the nearest whole number. a. What will be the profit-maximizing bundle price? $ 0 100 200 300 800 Both 800 400 400 400 800 c. How will profit from this pricing policy compare to profit under independent pricing of the two goods? When pricing independently, the profit-maximizing price for spreadsheets is $ processing is $ d. What is profit under independent pricing? $ and the profit-maximizing price for word
Table 17-5 The table shows the town of Driveaway's demand schedule for gasoline. Assume the town's gasoline seller(s) incurs a cost of $2 for each gallon sold, with no fixed cost. Total Revenue (Dollars) 0 350 600 750 800 750 600 350 0 Refer to Table 17-5. If there are exactly five sellers of gasoline in Driveaway and if they collude, then which of the following outcomes is most likely? O a. Each seller will sell 50 gallons and charge a price of $3. O b. Each seller will sell 30 gallons and charge a price of $5. O c. Each seller will sell 30 gallons and charge a price of $4. O d. Each seller will sell 40 gallons and charge a price of $4. Quantity (Gallons) 0 50 100 150 200 250 300 350 400 Price (Dollars per gallon) 8 7 6 5 4 3 2 1 0
In which of the following situations would Maria's Doughnut Shop have the MOST market power? Select one: a. The closest doughnut shop or bakery is 25 miles away from Maria's shop. b. There are two rival doughnut shops within three miles but no other bakeries. c. The closest doughnut shop is 10 miles away, but there is a bakery with breakfast pastries two miles away. d. Within three miles, there are five other doughnut shops and three bakeries that sell breakfast pastries.
1. If the demand for a good increases at the same time as the supply of the same good decreases, what will happen to the equilibrium price and quantity of the good? Explain. 2. What is the deadweight loss of monopoly? Show the deadweight loss when the monopolist can perfectly price discriminate. 3. What is the point of long run equilibrium of a monopolistically competitive firm. How does it compare to a competitive firm.
(Table: Gascolator Producers I) Banner and Sense are Bertrand competitors producing identical gascolators (a main line strainer). Banner's Sense's Price Price $ 80 $100 80 100 320 80 101 The inverse market demand curve for gascolators is P = 2,000-40, where Q is the quantity of gascolators and P is the price per gascolator. Banner and Sense produce gascolators at a constant marginal cost of $80. If Banner charges a price of $80 and Sense charges $80, Sense's quantity sold is 180 O240 Banner's Sense's Quantity Sold Quantity Sold
Table 17-4 Only two firms, ABC and XYZ, sell a particular product. The following table shows the demand curve for their product. Each firm has the same constant marginal cost of $8 and zero fixed cost. Price Quantity Total Demanded Revenue (Dollars per unit) (Units) (Dollars) 28 26 130 24 10 240 22 15 330 20 20 400 18 25 450 16 30 480 14 35 490 12 40 480 10 45 450 8 50 400 55 330 4 60 240 2 65 130 70 Refer to Table 17-4. If this market were perfectly competitive instead of oligopolistic, what quantity would be produced? а. 25 b. 50 С. 35 d. 70 O O O O
Price $100 90 80 70 60 50 40 Quantity Average Total Cost 1 2 3 4 5 6 7 $100 63 52.67 49.50 49.60 50 52.29 TC TR Refer to the above data for a monopoly (Table 4). This monopoly firm will maximize its profit by producing: MR (Quantity) MC Note: Round to the nearest whole number ‒‒‒‒‒‒ Refer to the above data for a monopoly (Table 4). At its profit-maximizing output, this monopoly's total profit will be: