Candy bars are produced in a monopolistically competitive market. A profit-maximizing producer finds that marginal revenue equals marginal cost equals $1.50 when output is 500 bars. Also, The average total cost (ATC) is $3 and price is $2 when output is 500 bars. An economist studying this information can conclude that economic profit is -$500 -$450 -$300 $100
Q: Assume money supply increases at rate z. Explain what seigniorage is. Use formulas. What are the…
A: Ways to fund Govt. debts: Sometimes govt spending becomes more than what govt is earning back. As a…
Q: Answer the following as indicated. (Format: problem, then, solution) 7. How many shares can you…
A: Amount Invested = 5000 NAV = 3.46
Q: In the restaruant business flour is considered a(n) overhead cost variable cost. total cost fungible…
A: Cost refers to the fiscal value of goods and facilities that sellers and buyers buy. Now According…
Q: A seller offers to sell an object to a buyer. The buyer and seller's valuations for the object, t…
A: A second-price sealed bid auction is a type of auction in which the player who bids the highest have…
Q: Explain what a prisoner’s dilemma is and relate your explanation to the situation that the members…
A: A prisoner's dilemma is a well-known decision-making and game theory paradox in which two rational…
Q: Define the term "HDI". Explain in more than 150 words and without plagiarism.
A: The Human Development Index (HDI), a statistic created and published by the United Nations since…
Q: Welfare costs exist in a single price monopoly, and even in some markets where price discrimination…
A: A firm can sell at a significantly higher production thanks to price discrimination. As a result, it…
Q: Referring to the graph below: a. Is this firm operating in the long run? How do you know? b. What…
A: In perfect competition, In long run , a firm will produce where P = MR = MC = ATC So, There will…
Q: Suppose two large countries are deciding whether to impose a tariff on each other. (a) Use a payoff…
A: The tax which is imposed by the government on imported services and goods is called the Tariff.The…
Q: A printer manufacturer estimates that the average purchaser of a printer will also purchase six ink…
A: Future value (FV) is the value of an ongoing asset at a future date in view of an expected rate of…
Q: Martin's Magical Milk Farm produces cow's milk and sells it to a local store for $2.20 per gallon.…
A: A marginal product is an alteration in the output brought about by using one additional unit of a…
Q: Which of the following is a variable cost? O Advertisement cost Health insurance O Material cost O…
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Suppose rr = required reserve ratio = 0.1 C = currency in circulation = $1,200 billion D = checkable…
A: deposits is the amount a savers deposit in the bank in order to protect and earn some interest rate…
Q: Two prospecting partners, Curtin and Dobbs, find an area containing 40 ounces of gold. For each day…
A: Nash equilibrium is the condition when the players get the maximum payoffs and will not get…
Q: How might advertising lead to a shift in the demand curve? By increasing the popularity of inferior…
A: Demand curve is the curve which shows all the possible combination of the quantity demanded at the…
Q: 12. In the long run, in monopoly there can be: Economic profits or losses No economic profits…
A: Monopoly is a market structure where there is only a single seller of the good in the market with no…
Q: The present value of $20,000 each year for 4 years at a 5% interest rate is approximately The…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: If nco>0 greater than zero do we say nco is positive? When we way nco>0 means that we have…
A: DISCLAIMER “Since you have asked multiple questions, we will solve the first three questions for…
Q: To manage cash flow, you should _____ and then subtract expenses you expect to incur. Select one:…
A: Since you have posted multiple questions, we will provide the solution only to the first question as…
Q: Two bidders compete in a sealed-bid auction for a single indivisible object. For each bidder i, the…
A: Let the valuation of two bidders be : b1 & b2 Also the their valuations for the bid be : v1…
Q: 1. Let's go back to the game played between Charlotte (automobile driver) and Erica (bicyclist).…
A: The amount of damages to be born by the injured and the injured are decided by using various rules…
Q: 4. The change in equilibrium output corresponding to an simultaneous increase in government spending…
A: The equilibrium level of output is the sum of consumption, investment, government spending, and net…
Q: Refer to the figure above. Favorable terms of trade for country B would allow country A to: O obtain…
A: Given information: There are two countries, i.e., Country A and Country B Both countries produce two…
Q: Suppose the economywide demand for money is given by: M = P(0.2Y – 25,000i). The price level Pequals…
A: Equilibrium is where the demand curve intersects the supply curve. Nominal value includes the…
Q: Refer to the information provided in Figure 34.1 below to answer the question(s) that follow.…
A: In a closed economy, export and import are zero. Hence, aggregate expenditure is the sum of…
Q: Keynesian-Monetarist debate revolves around the: A. quantity theory of money B. equation of…
A: As per quantity theory of money, price level multiplied by real output is equal to the money supply…
Q: A risk neutral insurer offers to insure an individual with a wealth of 25 dollars against a loss of…
A: Initial wealth=25 Loss=21 For A-- Loss probability=0.33 and no loss=0.66 For B --- loss…
Q: Refer to Table 12-4. Given the data in the table above, the marginal propensity to save is A) 0.3. B…
A: Marginal propensity to consume is the term used to describe the rise in consumption that results…
Q: Three players bargain over the division of 1 dollar. There are at most three rounds of bargain- ing.…
A: Backward induction is the process of figuring out the best course of action by thinking backwards in…
Q: Another name for the equilibrium exchange rate reported in the currency markets is the spot quote…
A: DISCLAIMER “Since you have asked multiple questions, we will solve the first question for you. If…
Q: Price and costs (dollars per unit) $50 $40 $30 $20 $10 0 30 60 MR 90 D MC ATC 120 150 180 Quantity…
A: Under monopolistic competition, the profit will maximize when the marginal revenue (MR) is equal to…
Q: A recent study found that the demand and supply schedules for frisbees are as follows: Price in PhP…
A: Here, the given table provided information about quantity supplied and quantity demanded of frisbees…
Q: See the cost information in the table below. The marginal cost of the 6th unit is Quantity…
A: Marginal Cost refers to the additional cost incurred due to production of an additional unit of…
Q: When you open a checking account at Bank of America, Bank of America has more reserves and more…
A: Checking account is one of the facilities provided by commercial banks as it is the account in which…
Q: Consider an AS-AD model for the U.S. Suppose an economic expansion in Mexico increases income for…
A: Aggregate demand is the sum of Consumption, Investment, government spending and net export. Net…
Q: When a firm uses price discrimination as its pricing strategy, it will charge the lower price to…
A: Price discrimination refers to the marketing tactic utilised by monopoly businesses in which it sets…
Q: Describe the structure of the Fed's Open Market Committee (FOMC). What is this committee's primary…
A: The government's monetary policy includes open market operations as a weapon. It entails purchasing…
Q: 2. The market for plasticans is perfectly competitive. Market Supply is given by Q=2P and Market…
A: Perfectly competitive markets are known for a huge number of traders and consumers in the market.…
Q: D Question 16 Suppose the following: • Smokey Bank has total deposits of $600,000. . In addition, it…
A: The formula for money multiplier is 1 divided by the required reserve ratio as we know the required…
Q: Which of the following would be most likely to induce Congress and the president to conduct…
A: Fiscal policy refers to the policy under which the state or government uses instruments such as…
Q: Cite an example of how governments can affect economic growth.
A: Economic growth is the process through which the final commodities and services produced by the…
Q: A decrease in Social Security payments will decrease consumption spending. decrease investment…
A: The majority of the federal government budget is made up of entitlements. Among the entitlements are…
Q: entify the benefits outsourcing brings to both consumers and producers in the domestic market over…
A: Outsourcing is a business practice in which services or job functions are hired out to a 3rd party…
Q: The Federal Reserve (also called the Fed) is the central bank of the United States. The Fed oversees…
A: The Federal Reserve is the central bank of USA. One of the most important functions of central bank…
Q: Calua is an economy in which people live for three periods. They receive an endowment in only one…
A: Future value estimates the value of an asset on a specified future date based on the current…
Q: the market for inputs to the production is also known as the ______ market a. production b.…
A: In economics the factor of production are used to produced goods and services.
Q: Two bidders compete in a sealed-bid auction for a single indivisible object. For each bidder i, the…
A: Let the valuation of two bidders be : b1 & b2 Also the their valuations for the bid be : v1…
Q: Question 2 if there is a monopsony, how is the wage for workers decided? a. one firm decides, to…
A: A monopsony occurs when there is just one consumer who regulates the market, sets the price, and…
Q: Use the following information to answer questions 23-24 below. Suppose a representative perfectly…
A: A perfectly competitive firm is a price taker, which means it takes the price set by the market…
Q: A telephone company, a restaurant and a hospital are companies that according to their economic…
A: When the production of services or goods takes places with the help of inputs or techniques , it is…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- Larry, Curly, and Moe run the only saloon in town.Larry wants to sell as many drinks as possiblewithout losing money. Curly wants the saloon tobring in as much revenue as possible. Moe wantsto make the largest possible profits. Using a singlediagram of the saloon’s demand curve and its costcurves, show the price and quantity combinationsfavored by each of the three partners. Explain. (Hint:Only one of these partners will want to set marginalrevenue equal to marginal cost.)Suppose you are the economic adviser ofa company producing three brands of mobile pnones;Nokia 10, Samsung X and iPhone 7. Suppose further that, your company currently sells 120units of iPhone Z at e800 per unit, 150 units of Samsung X at e800 per unit and 200 units ofNokia 10 at e100 per unit, but in a bid to maximize profit, the company's managing directorproposes an increase in price of Samsung X from e800 to e1000 per unit for which quantitydemanded is anticipated to fall from 150 to 100 units; iPhone Z from e800 to e 1200 per unitfor which quantity demanded is anticipated to fall from 120 to 100 units; and Nokia 10 from100 to 200 per unit for which quantity demanded is expected to fall from 200 to 100 unitsUsing the mid-polint formula. compute the price elasticity of demand for each brand.From your answer in i, what is the type and economic interpretatiom of each brand'sii.value of elasticity.Duck Donuts sells plain and premium donuts. Premium donuts are plain donuts with special toppings. Demand for plain (PL) donuts is: PPL = 3 - 0.2QPL and Demand for premium (PR) donuts is: PPR = 4.4 - 0.4QPR The marginal cost for each is: MCPL = 0.20 MCPR = 0.40 Which of the following statements is true? a.Plain donuts generate more Total Revenue than premium donuts b.More premium donuts will sell than plain donuts c.Only premium donuts should be sold d.Only plain donuts should be sold e.Premium donuts generate more Total Profit than plain donuts
- As the new general manager of the Grand Palladium Jamaica luxury all-inclusive resort, youare assessing your pricing policies. Currently, the price of a weekend stay is $2,000 perguest. You estimate the marginal cost of serving a guest at $1,600, and while yourpredecessor unfortunately did not leave you data from the pricing experiments and testmarketing she performed, you do know that such experiments were done, and that yourpredecessor was competent.a. What is your best estimate of the elasticity of demand for a weekend stay at the GrandPalladium?b. Your learned that at the current price, the resort is only 80% full on the weekends.Remembering the sense of belonging that you experienced in a crowded subway duringthe rush hour, you contemplate lowering the price so the resort is completely full. What isyour back-of-the-envelope calculation for how much you need to lower the price?c. After some thought you cooled to the idea of full occupancy. Instead, you focused yourenergy and…A golf club’s owner has commissioned a market study that estimates the average customer’s monthly demand curve for playing 18-hole golf game to be Q=50 – 0.5P, where Q stands for the number of 18-hole golf game, and P is the green fee. The marginal cost is given by MC=20. (1) Under two-part pricing strategy, what is the optimal amount of green fee to charge for one round of 18-hole golf game? (2) Under two-part pricing strategy, what is the optimal amount of membership due? (3) Under two-part pricing strategy, what is the size of the profit obtained from the average customer?Aidan and Celina are the only sellers of jack russell terrier (JRT) inAntigua. Celina chooses her profit maximizing number of JRTs to sell, q1, based on the number of JRT's that she expects Aidan to sell. Aidan knows how Celina will react and chooses the number of JRTs that she herself will sell, q2, aftertaking this information into account. The inverse demand function for JRTs isP(q1+ q2) = 2,000 - 2(q1 + q2). It costs $400 to raise a JRT to sell. (a)Explain in detail what type of competitors are Aidan and Celina. (b) If Celina expects Aidan to sell q2 JRTs, what will her own marginal revenue be if she herself sells q1 JRTs? (c) What is Celina's reaction function, R(q2)?(d) Now if Aidan sells q2 JRTs, what is the total number of JRT's that will be sold. (e) What will be the market price as a function of q2 only? (f) What is Aidan's marginal revenue as a function of q2 only? (g) How many JRTs will Aidan sell? (h) How many JRTs will Celina sell? (i)
- A golf cub’s owner has commissioned a market study that estimates the average customer’s monthly demand curve for playing 18-hole golf game to be Q=50 – 0.5P, where Q stands for the number of 18-hole golf game, and P is the green fee. The marginal cost is given by MC=20. (1) Under two-part pricing strategy, what is the optimal amount of green fee to charge for one round of 18-hole golf game? (2) Under two-part pricing strategy, what is the optimal amount of membership due? (3) Under two-part pricing strategy, what is the size of the profit obtained from the average customer?You are employed at a monopolistic company as a research (pricing) economist and you are deriving the behavior of two markets based on demand curves given by:D1(p1) = 50 - p1D2(p2) = 50 - 2p2 Assume that the marginal cost is constant at $8 a unit. (a) If it can price discriminate, what price should it charge in each market in order to maximize profits?(b) If it can’t price discriminate, what price should it charge?Aidan and Celina are the only sellers of jack russell terrier (JRT) inAntigua. Celina chooses her profit maximizing number of JRTs to sell, q1, basedon the number of JRTs that she expects Aidan to sell. Aidan knows how Celinawill react and chooses the number of JRTs that she herself will sell, q2, aftertaking this information into account. The inverse demand function for JRTs isP(q1 + q2) = 2, 000 − 2(q1 + q2). It costs $400 to raise a JRT to sell.(a) Explain in detail what type of competitors are Aidan and Celina.(b) If Celina expects Aidan to sell q2 JRTs, what will her ownmarginal revenue be if she herself sells q1 JRTs?(c) What is Celina’s reaction function, R(q2)?(d) Now if Aidan sells q2 JRTs, what is the total number of JRTsthat will be sold?(e) What will be the market price as a function of q2 only?(f) What is Aidan’s marginal revenue as a function of q2 only?(g) How many JRTs will Aidan sell?(h) How many JRTs will Celina sell?(i) What will be the industry price? ANSWER…
- Aidan and Celina are the only sellers of jack russell terrier (JRT) inAntigua. Celina chooses her profit maximizing number of JRTs to sell, q1, basedon the number of JRTs that she expects Aidan to sell. Aidan knows how Celinawill react and chooses the number of JRTs that she herself will sell, q2, aftertaking this information into account. The inverse demand function for JRTs isP(q1 + q2) = 2, 000 − 2(q1 + q2). It costs $400 to raise a JRT to sell.(a) Explain in detail what type of competitors are Aidan and Celina.(b) If Celina expects Aidan to sell q2 JRTs, what will her ownmarginal revenue be if she herself sells q1 JRTs?(c) What is Celina’s reaction function, R(q2)?(d) Now if Aidan sells q2 JRTs, what is the total number of JRTsthat will be sold?(e) What will be the market price as a function of q2 only?(f) What is Aidan’s marginal revenue as a function of q2 only?(g) How many JRTs will Aidan sell?(h) How many JRTs will Celina sell?(i) What will be the industry price?UCOM is able to purchase an exclusive right to sell a soccer channel (SC) in its market area. Let's assume that UCOM pays $150,000 a year for the exclusive marketing rights to SC. Since UCOM has already installed cable to all of the homes in its market area, the marginal cost of delivering Soccer Channel to subscribers is zero. The manager of UCOM needs to know what price to charge for the Soccer Channel service to maximize her profit. Before setting price, she hires an economist to estimate demand for the Soccer channel service. The economist discovers that there are two types of subscribers who value soccer. First are the 4,000 die-hard soccer fans who will pay as much as $150 a year for the new soccer channel. Second, the soccer channel will appeal to about 20,000 occasional TV viewers who will pay as much as $20 a year for a subscription to soccer channel. What is the deadweight loss associated with the non-discriminating pricing policy compared to the price discriminating…COURSE: MICROECONOMICS - Stackelberg ModelIn a given market good there are only 2 firms that satisfy the demand, and their respective total cost functions are: CTi = 400 and the demand that is estimated is P = 120 - 2QIf the exception variable of both firms is the quantity they will produce, such that the decisions to produce are made sequentially firm number 1 will be the leader who decides the quantity to produce and firm number 2 (follower) decides based on the production of firm number 1, we ask:(a) quantity produced by each firm and its equilibrium price in the market.(b) Profit of each company at equilibrium and (c) Graph your results
