Demand A ATC MC MR Quantity of Sparkle Toothpaste Indicate which of the labeled areas represent consumer surplus derived from the purchase of Sparkle toothpaste or deadweight loss relative to the efficient level of output. A B Consumer Surplus Deadweight Loss Suppose the government required Sparkle to produce the efficient level of output. Which of the following describes what would happen to the firm and Sparkle's customers? Sparkle would earn negative profit, forcing it to shut down, and Sparkle's customers would gain no consumer surplus. Sparkle would earn positive profit and increase production, boosting consumer surplus. Sparkle would earn zero profit, and its customers would be just as well off as before. Price, Cost, Revenue

Demand A ATC MC MR Quantity of Sparkle Toothpaste Indicate which of the labeled areas represent consumer surplus derived from the purchase of Sparkle toothpaste or deadweight loss relative to the efficient level of output. A B Consumer Surplus Deadweight Loss Suppose the government required Sparkle to produce the efficient level of output. Which of the following describes what would happen to the firm and Sparkle's customers? Sparkle would earn negative profit, forcing it to shut down, and Sparkle's customers would gain no consumer surplus. Sparkle would earn positive profit and increase production, boosting consumer surplus. Sparkle would earn zero profit, and its customers would be just as well off as before. Price, Cost, Revenue

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Monopoly

Section: Chapter Questions

Problem 10PA

See similar textbooks

Similar questions

It costs $250 to produce an X-Box. We are trying todetermine the selling price for the X-Box. Prices between$200 and $400 are under consideration, with demand forprices of $200, $250, $350, and $400 given below. SupposeMSFT earns $10 in profit for each game that an X-Boxowner purchases. Determine the optimal price andassociated profit for the case in which an average X-Boxowner buys 10 games. Console Price ($) Demand200 2.00E06250 1.20E06350 6.00E05400 2.00E05Unit cost $250
The car manufacturing market consists of100 identical factories, each with a marginalcost curve represented by MC =120 + 20where Q represents the amount of carsoffered.a) Derive the industry supply curve for cars.b) If the demand for cars is represented byP=250- 4Q, how many cars are bought atequilibrium?c) Calculate the aggregate consumer andproducer surplus at market equilibrium.
During the night, the electricity sector has a marginal cost of $1/MWh (megawatt-hour) forthe first 100 MWh produced (from wind turbines), and $20/MWh for each additional unit (from gasgenerators). During the day, they have a marginal cost of $1/MWh (megawatt-hour) for the first 50MWh produced (from solar panels), and $20/MWh for each additional unit (from gas generators).Nighttime and daytime demand are given by QnightD = 50 −P and QdayD = 200 −P , respectively.What are the market quantity and price during the day, and the market quantity and price at night?This is a model of the wholesale market for electricity, which you can think of as being competitive,but there is no resale between night and day.
In mid-2010, Saudi Arabia and Venezuela (both members of OPEC)produced an average of 8 million and 3 million barrels of oil a day,respectively. Production costs were about $20 per barrel, and the price ofoil averaged $80 per barrel. Each country had the capacity to producean extra 1 million barrels per day. At that time, it was estimated that each1-million-barrel increase in supply would depress the average price of oilby $10.a. Fill in the missing profit entries in the payoff table.b. What actions should each country take and why?Venezuela3 M barrels 4 M barrels8 M barrels _____, _____ _____, _____ Saudi Arabia9 M barrels _____, _____ _____, _____c10GameTheoryandCompetitiveStrategy.qxd 9/29/11 1:33 PM Page 430Summary 431c. Does the asymmetry in the countries’ sizes cause them to take differentattitudes toward expanding output? Explain why or why not. Commenton whether or not a prisoner’s dilemma is present.
Continuing your analysis of the competitive US manufacturing industry from Question 1, withdemand of Qd = 500 – 8P and supply of Qs = 4P – 100, suppose a technological innovationcauses the supply curve to increase, shifting the curve down by $15 for every given quantity Q. Determine the new supply equation. Solve for equilibrium price P2 and quantity Q2. Depict the original supply S1, the new supply S2, and the original demand D1 on theusual P, Q diagram. Label all intercepts (including two intercepts for the demand curveand one intercept for the supply curve). Clearly indicate and label the new marketequilibrium. Graphically indicate the areas of Consumer Surplus (CS2) and Producer Surplus (PS2)that resulted from the new market equilibrium. Compute the values of Consumer Surplus (CS2) and Producer Surplus (PS2) associatedwith the new market equilibrium, clearly indicating the units that CS and PS aremeasured in. Who has benefited from technological innovation, based on the…
A toy manufacturer makes miniature trucks. The pricep(in dollar) and the demandx(numberof miniature trucks) are related by the equation 6000−600p=x. The total cost for the sametoy manufacturer to producexminiature trucks can be modeled byC(x) = 8x+ 450.(a) (10 points) Express the pricepin terms of the demandx. Find the revenueR(x) if themanufacturer sellsxminiature trucks in a month and find the domain of this function.(b) (10 points) Graph the cost and revenue functions on the same coordinate system for 0≤x≤6000.(c) (10 points) What is the minimum number of trucks the toy manufacturer must sell tobreak even?(d) (10 points) FindP′(300) and interpret the result.(e) (10 points) What is the exact profit from the sale of the 301stminiature truck?
A shift in the demand curve is caused by a change in: O a) the price of the item. Ob) the behavior of suppliers. Oc) costs of production. d) one of the determinants of demand. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate.
A tuition agency hires tutors to teach students. The following table displays how total outputincreases as tutors increase.No. of Tutors 1 2 3 4 5Total No. ofStudents4 10 18 24 3Tutors cost $50 each regardless of how many students each tutor has. The agency paid $500 in non-refundablemarketing fees to set up the business as a fix cost. In the short run, considering the shut-down condition, whatis the lowest price per student Tom’s tuition agency can charge? Explain your answer.
2. The Ice Cream Lovers Society decided to open up an ice cream stand during the summermonths. They calculated that it would cost them $0.80 to make a scoop of ice cream and$350 a month to operate the stand. They hired a research team who determined that theprice-demand function given in dollars isp x x ( ) = −8 0.02wherexis the number ofscoops sold.a. Find the revenue functionR x( )b. Find the value ofxthat produces the maximum revenue algebraically.c. Find the maximum revenue algebraically.d. Find the price per scoop of ice cream that produces the maximum revenuealgebraically.e. Find the cost functionC x( )that describes the monthly costs of operating the icecream stand.f. Find the break-even points to the nearest scoop algebraically usingR x( )andC x( ) .g. Find the profit functionP x( ).
The market for apple pies in the city of Ectenia iscompetitive and has the following demand schedule:Price Quantity Demanded$1 1,200 pies2 1,1003 1,0004 9005 8006 7007 6008 5009 40010 30011 20012 10013 0Each producer in the market has fixed costs of $9 andthe following marginal cost schedule:Quantity Marginal Cost1 pie $ 22 43 64 85 106 12a. Compute each producer’s total cost andaverage total cost for each quantity from 1 to6 pies.b. The price of a pie is now $11. How many pies aresold? How many pies does each producer make?How many producers are there? How much profitdoes each producer earn?c. Is the situation described in part (b) a long-runequilibrium? Why or why not?d. Suppose that in the long run there is free entryand exit. How much profit does each producerearn in the long-run equilibrium? What isthe market price? How many pies does eachproducer make? How many pies are sold inthe market? How many pie producers areoperating?
demand equations QD = 3550 - 20P supply equations QS = 1800 + 30P Calculate initial consumer surplus for the above firm.
3.1 BAD Enterprises is considering increasing the price of its harmonicas,currently $20, by 25 per cent. BAD’s current revenue is $12,000 a month,and the PED for its harmonicas is estimated to be 1.8.a. Calculate the effect of the price change on BAD’s revenue.b. BAD now considers increasing its advertising budget to restore its salesrevenue to its previous level. BAD is currently spending $1,500 a monthon advertising and estimates its AED to be 1.5. What will its new budgethave to be?c. What can you say about what will happen to profit in both (a) and (b)compared with the original level of profit? 3.5 MK Corp estimates that its demand function is as follows:Q ¼ 400 12:5P þ 25A þ 14Y þ 10P where Q is the quantity demanded per month, P is the product’s price(in $), A is the firm’s advertising expenditure (in $’000 per month), Y is percapita disposable income (in $’000), and P * is the price of AJ Corp.a. During the next five years, per capita disposable income is expected toincrease…