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- Could you also answer the following questions too. If Big Top is regulated to charge a price equal to average total cost, what is the quantity of tickets sold, the price of a ticket, and economic profit? If Big Top is regulated to produce the efficient output, what is the quantity of tickets sold, what is the price of a ticket, and what would be the consumer surplus? Draw a graph to illustrate the circus market if regulators set a price cap that enables Big Top to break even. Show the deadweight loss in your graph.If the government wants to increase the market efficiency through price regulation, would you suggest the government setting the price equal to the firm’s marginal cost or its average total cost? Explain in detail with the diagram in partThe figure below shows a market in which there is a single seller and a constant marginal cost of production. If it charges a single price for its product, what is the seller's profit-maximizing price and quantity? If the seller charges a single price for its product, what are the dollar amounts of consumer surplus, producer surplus, and deadweight loss? If the seller price discriminates perfectly, what is the seller's profit-maximizing price and quantity? (Hint What is the range of prices?) If the seller price discriminates perfectly, what are the dollar amounts of consumer surplus, producer surplus, deadweight loss and total surplus?
- 13 sellers and 13 buyers are each willing to buy or sell one unit of a good, with values {$13, $12, $11, $10, $9, $8, $7, $6, $5, $4, $3, $2, $1}. If there is a single monopoly market-maker who keeps as profit the difference between bid and ask prices, the equilibrium quantity traded in the market is: A. 7. B. 4. C. 1. D. 10. Why?SKF Zoo visitors consist of two different groups, adults and children. The following is a table of requests as follows: PRICE (RM) QUANTITY (ADULTS) QUANTITY (CHILDREN) 5 15 20 6 14 18 7 13 16 8 12 14 9 11 12 10 10 10 11 9 8 12 8 6 13 7 4 14 6 2 The cost of a suit per unit of quantity is RM5. Assuming you are an SKF Zoo owner who wants to maximise profits, you need to indicate the difference for each price, quantity, and profit level, if SKF Zoo charges (a) different prices in each market. (b) the same price in both markets combined.Consider a dental service market. The demand for the service is given by P=600-0.7Q, where P is the price and Q is the quantity demanded. The market is regulated so that each dentist must charge each service provided at the marginal cost, which is $100. If each patient has an insurance that pays 60% of the service received, then how many services will be provided in total? (two dec places)
- We want to model the oil markets of the 19th century. And let the inverse demand for oil be P = 300 - 2Q, and the marginal cost of producing oil be MC = Q. Standard Oil, during the second half of the 19th century, can be modeled as a monopsony. If we assume the oil market is a monopsony, what is the quantity produced in equilibrium? Give the exact value up to two sig figs after the decimal point.Under one form of government price regulation, the government sets the price at a level (which is equal to $20 in the above graph) and the firm then sets MC equal to the regulated price to determine a profit-maximizing quantity at the regulated price. (a) If the regulated price is $20 per unit, how many units will the regulated monopoly produce? (b) If the regulated price is $20, how much will consumers want to buy? (c) Is there a surplus or a shortage or neither at the regulated price? If there is a surplus or shortage, how much is the surplus or shortage? (d) At what regulated price would the deadweight loss be zero? (e) Will the deadweight loss of the monopoly represented in the above graph be larger, smaller or the same at a price of $20 compared to at a price of $200? You do not have to calculate the deadweight loss at either price, you just have to state whether the deadweight loss is larger, smaller or the same at $20 compared to $200.Under a monopoly, demonstrate with with a demand curve, marginal revenue curve, and cost curve why a binding price ceiling may actually increase the quantity sold. Thank you.
- A monopoly producer of music videos sells them to TV stations and to individual consumers. BecauseTV stations have special formatting and quality requirements, producers can separate these two markets and sellessentially the same product at two different prices. You are given the following demand curves per year for thesedistinct markets:TV stations: P1 = 80 - 0.01Q1Individual consumers: P2 = 60 - 0.01Q2where P refers to prices charged to each group and Q refers to quantities demanded by each group. The variable costof producing music videos (once the video has been shot) is uniform at €4 per video. In addition, there are sunk fixedcosts of €20,000 for the shooting of each music video (for design, promotion and hiring artists).3.1. If the producer of music videos can price discriminate by charging different prices to each group, determine theprofit-maximizing price charged to TV stations and to individual consumers.3.2. Assume now that the monopoly producer of music videos is unable to…How would you describe the development of the market regulation and the concept of "fair competition" in the market?Using the MR = MC rule, what is the profit-maximizing level of output (in thousands of KWHs)? What price will Putrid charge for the profit-maximizing level of output? Assume that if electricity is supplied by competitive firms, the market price is 55 and the quantity supplied is 8 (‘000 KWHs)? What is the amount of the deadweight loss to society of producing electricity by monopolist Global Gas and Electric? Determine and compare the amount of consumer surplus and producer surplus if the service is provided by competitive firms and by the monopolist.