1. The Reinheitsgebot is a set of laws established in the 1500s that regulate the production and sale of beer in Germany. Among its provisions, the edict set maximum prices that brewers could charge at various times of the year: During Oktoberfest, the price for one [Bavarian Liter] is not to exceed one Pfennig (Penny, Munich value). Suppose that the demand for beer is given by $QD = 6000-1600P, and the supply of beer is given by QS = -1000+2000P. a) How will a 1-Pfennig price ceiling affect the price paid by consumers for beer, and how will it affect the quantity consumed?
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- 1. Supposed the firm has fixed cost production but no variable cost.The profit of firm is maximized when a. It produce at the level where it's a total revenue is maximized b. It produce at the level where it's Marginal revenue is equal to price c. It produce at the level where it can charge the highest price possible d. It produce at the level where it's average cost is equal to its marginal cost 2. The most common source of illegal Monopoly today is a. Predatory pricing b. Intellectual property rights c. Royal edict d. Natural monopoly 3. In a monopolist ( profit maximizing) marginal revenue P> MC ( the price exceeds the marginal cost). The implies that a. The consumer surplus is equal to the producer surplus b. The total value of the good is maximized c. The equilibrium is Marshall inefficient d. The market price is equal to the market quantityWhich are the two key ’problems’ encountered in aggregating on the consumer side, and why it not occurs on the producer side ? Pls short answer in 15-20 SentencesUse the following information for questions 3-6. The columns indicate the number of trains running. Total railroad profits are the total profits to the railroad from running the specified number of trains. Total lost farmer profits are total profits the farmer loses from a specified number of trains running. Trains 1 2 3 Total Railroad Profit $100 $200 $300 Total Lost Profit for Farmer $40 $130 $250 If the court were instead to protect the Farmer’s crops with a liability rule, what are joint Railroad-Farmer surplus? A. $140 B. $50 C. $60 D. None of the above
- A computer store sells WP and SS. Given below are themaximum amounts two consumers will pay for these goods and for a bundle that contains bothgoods. WP SS Bundle carolina $100 $90 $190 shawn $90 $40 $130 (a) What is the firm’s revenue if it sells the WP at a price of $90 and the SSat a price of $90? The goods are only available individually and not as a bundle. Please showyour calculations.(b) Will the firm charge $130 or $190 for the bundle if it wants to earn maximum revenue?Assume that the goods are only sold as a bundle and not available separately. Please explain.(c) Will selling individually or selling a bundle result in higher revenues?7. Define the principles of diminishing marginal utility and increasing marginal costs. How are they relevant to the equilibrium point? 8. How do you market systems achieve perfect efficiency? 9. In what three wats do perfectly competitive free markets establish perfect morality?1. TopGames buys the rights to sell a certain video game title worldwide. top games pay $400,000 for this right and the marginal cost of providing the video game download is zero. TopGames’ economist realizes they have two groups of customers: the 2,000 hard-core fans of this game who will pay up to $150 a year to be able to play this game; and the 10,000 casual gamers who will pay up to $50 a year to play this game. If TopGames can NOT price discriminate, what is its profit-maximizing price? What is its profit? a. Price = $50; Profit = negative $100,000 b. Price = $50; Profit = $300,000 c. Price = $150; Profit = $100,000 d. Price = $150; Profit = $500,0002. TopGames buys the rights to sell a certain video game title worldwide. top games pay $400,000 for this right and the marginal cost of providing the video game download is zero. TopGames’ economist realizes they have two groups of customers: the 2,000 hard-core fans of this game who will pay up to $150 a year to be able to play this…