4:21 lLTE Work IU-12 10. "Market power" refers to a firm's ability to: 11. If a firm collects $80 in revenue when it sells 4 units, $100 in revenue when it sells 5 units, and $120 in revenue when it sells 6 units, then one can infer the firm is a(n): 12. Suppose the figure below shows the demand curve, marginal revenue curve and marginal cost curve for a monopolist A МС к Е MR D 0 Н F G Quantity (units/day) When this monopolist maximizes its profit, consumer surplus equals the area: Price ($/unit)
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- Will the firms in an oligopoly act more like a competitors or more like competitors? Briefly explain.onsider the table below and assume the market price is $35 per unit. Totalproduct Totalfixed cost TotalVariablecost 0 150 0 1 150 50 2 150 75 3 150 112.4 4 150 150 5 150 200 6 150 270 7 150 360 8 150 475 9 150 620 10 150 800 Now assume there are 600 identical firms in this industry, that is, there are 600 firms, each of which has the same cost data as the single firm discussed above. Suppose, too, that the demand curve for this industry is as follows: Price Quantitydemanded $20 6,800 30 5,975 45 5,500 60 5,125 75 4,500 95 4,200 120 3,600 150 2,400 In equilibrium each firm will realize: Multiple Choice an economic profit of $155. a loss of $45. an economic profit of $35. a loss of $135.Microeconomics Q193515 Deadline passed If the price (P) of maple syrup is $4.00 per can, average cost (AC) is $4.50 per can and average variable cost (AVC) is $3.00 per can, then to maximize profit or minimize loss the firm should: Answer approved2$1 Will be moved to archive within about 9 hours. Microeconomics Q194159 4 hours 26 min 1. Briefly discuss two major differences between the theory of perfect competition and the theory of monopoly. 2. What reasons make the demand curve of a perfectly competitive firm completely horizontal? Only state. 3. Represent the information below in an appropriately labelled diagram with the relevant curves, and decide whether the firm should continue production or shut down in the short run, using calculations. A perfectly competitive firm produces 100 mugs to maximize its profit. The average total cost (ATC) is 13 taka per mug and the average fixed cost (AFC) is 4 taka per mug when the firm produces 100 mugs. The…
- a) What are the basic differences between governmental monopoly and market monopoly? Briefly discuss the short-run equilibrium of a firm under a perfectly competitive market when P < AVC < ATC.The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a purely competitive firm that produces novelty ear buds. Assume the market for novelty ear buds is a competitive market and that the price of ear buds is $6.00 per pair. Quantity of Ear Buds MC ($) ATC ($) 10 - 5.00 15 2.00 4.00 20 2.44 3.61 25 3.56 3.60 30 4.02 3.67 35 5.49 3.93 40 5.93 4.18 45 8.59 4.67 Instructions: In part a, enter your answer as the closest given whole number. In parts b–d, round your answers to two decimal places. a. If Buddies wants to maximize profits, how many pairs of ear buds should it produce each week? _ pairs b. At the profit-maximizing quantity, what is the total cost of producing ear buds? $ _ c. If the market price for ear buds is $6 per pair, and Buddies produces the profit-maximizing quantity of ear buds, what will Buddies profit or loss be per week? $ _ d. Now assume the market price is $5.50 per…6 In 1916, Henry Ford was quoted as saying the following: "There are men who will pay $360 for a car who would not pay $440. We had in round numbers 500,000 buyers of cars on the $440 basis, and I figure that on the $360 basis we can increase sales to possibly 800,000 cars for the year - less profit on each car, but more cars, more employment of labor, and in the end we get all the total profit we ought to make." If Ford's estimate as correct, what was the price elasticity of demand for his cars? By how much did total revenue increase? 7 Using the data from question 6, above, write the demand curve equation for Henry Ford's cars. 8 Using the demand curve equation from question 7, build a graphic to sell Ford cars to the public in 1916.
- 6 In 1916, Henry Ford was quoted as saying the following: "There are men who will pay $360 for a car who would not pay $440. We had in round numbers 500,000 buyers of cars on the $440 basis, and I figure that on the $360 basis we can increase sales to possibly 800,000 cars for the year - less profit on each car, but more cars, more employment of labor, and in the end we get all the total profit we ought to make." If Ford's estimate as correct, what was the price elasticity of demand for his cars? By how much did total revenue increase?You have conducted a study to determine if there is independence or dependence between market segments (A-C) and prices the segments are willing to pay for a product. The following cross tabular output appears. Under $10 $11-$15 over $15 All A 50 30 20 100 50.00 30.00 20.00 33.33 27.27 50.00 16.67 10.00 6.67 50.00 36.67 13.33 0.000 1.212 3.333 B 40 50 10 100 40.00 50.00 10.00 26.67 45.45 25.00 13.33 16.67 3.33 50.00 36.67 13.33 2.000 4.848 0.833 C 60 30 10 100 60.00 30.00 10.00 40.00 27.27 25.00 20.00 10.00 3.33 50.00 36.67 13.33 2.000 1.212 0.833 All 150 110 40 300…For each of the following pairs of firms, explainwhich firm would be more likely to engage inadvertising.a. a family-owned farm or a family-ownedrestaurantb. a manufacturer of forklifts or a manufacturer of carsc. a company that invented a very comfortable razoror a company that invented a less comfortable razor
- The following table shows costs and revenue schedules for a firm. Quantity (units) AC (£) MC (£) AR (£) MR (£) 100 3.20 3.00 3.00 3.00 200 2.80 2.80 3.00 3.00 300 2.84 3.00 3.00 3.00 400 3.00 3.60 3.00 3.00 500 4.00 6.00 3.00 3.00 600 6.00 9.00 3.00 3.00 How much total profit will the firm make at the profit-maximising level of output? A) £40 B) £16 C) £0 D) £48Henry Potter owns the only well in town that produces clean drinking water. He faces the following demand, marginal revenue, and marginal cost curves: Demand: P=60−QP=60−Q Marginal Revenue: MR=60−2QMR=60−2Q Marginal Cost: MC=QMC=Q On the following graph, use the blue line (circle symbol) to graph Mr. Potter's demand curve. Then, use the black line (cross symbol) to graph his marginal revenue (MR) curve. Next, use the orange line (square symbol) to graph his marginal cost (MC) curve. Finally, use the grey point (star symbol) to indicate the profit-maximizing price and quantity. : The profit-maximizing quantity is___units, and the profit-maximizing price is___. Mayor George Bailey, concerned about water consumers, is considering a price ceiling that is 10% below the monopoly price. At this new price, the quantity demanded would be___units. At this quantity, the marginal cost would be___the price. Therefore, the profit-maximizing Mr. Potter___produce…DuopolyMarket for mechanical pencils can be described by the following demand schedule:Price | Number of pencils demanded$6 | 80$5 | 200$4 | 320$3 | 440$2 | 560$1 | 680$0 | 800The fixed cost is $340, while the variable cost is $0.50.d) If there were two firms on the market and they agreed to cooperate, how much would eachfirm need to produce? Follow the procedure outlined in the lecture and show that the otherfirm would prefer to deviate from the agreement.e) When the firms deviate from the agreement, there is a new optimal level of output. Showwhether the firms have an incentive to deviate from that level?f) If there were two firms on the market, what would be the price and the quantity of pencilstraded if the firms couldn’t cooperate?
