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- Suppose we are studying the long-run competitive market for robots, the market demand for robots isgiven byD(p)=24p. All the firms are identical with the following cost curveC(y)=y22+8. a)What is the long-run competitive market equilibrium? Rick is a single consumer in the market; his consumption of robots is given byDi(p)=Mp, whereMis his fixed income. Rick is also a government regulator for the robot market; he decides if themarket is competitive or a monopoly.Morty is a firm in the market (he faces the same cost curve as everyone else:C(y)=y22+8). Mortywould like to operate as a monopolist (instead of a firm in a competitive market). b)How much would Morty have to pay/compensate Rick in order for Rick to allow Morty to operateas a monopolist (The market demand curve is the same as part a))? c)Suppose instead this was an oligopoly market with 2 firms engaged in Bertrand competition; bothfirms face the same cost curve and demand curve as part a). How much…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…Alvin’s demand for bottled water is given by QdA = 8−0.5P. Betty’s demand function is QdB = 6 − P. Calculate Alvin and Betty’s marginal and total willingness to pay for four bottles of water and illustrate graphically. Compute the aggregate demand for bottled water, assuming Alvin and Betty are the only consumers. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
- According to Professor Kosmos, the demand for hot chocolate from the university café has the schedule QD = 2500 – 135p, where p is the price. The owner of the café says that their supply schedule is QS = 1600 + 315p. i) Identify the café’s daily profit maximising price and quantity. ii) When a new hot chocolate machine is installed, the Professor finds that the supply schedule has changed to QS = 1625 + 365p. What are the café’s new daily profit maximising price and quantity? iii) Find the price elasticity of demand for the café’s hot chocolate and comment on the result.TNBest is the only electricity company in a suburban area. Suppose that the demand for electricity for this area is ? = 500 − 10? and the cost of producing electricity is ?? = 500 + 2?.(i) If the city council want to ensure that TNBest doesn’t lose money, comment on the lowest price they can impose and TNBest’s profit and output level with this new price.Assume that you are an economic consultant. The firm that hired you has provided the information below. The firm is a price searcher and wants to maximize its profit (or minimize its loss). InformationPrice: $4Elasticity of demand at price of $4 is Ed=-1Quantity of output: 2000Total variable cost: 4000Average fixed cost: 1Marginal cost is constant and equal to the average variable cost: MC=ACV=2. Which of the following answers correctly describes this case? a) The firm is maximizing profits at the current price of $4.b) The firm should increase price and reduce quantity produced.c) None of the other answersd) Firm should reduce price and increase quantity produced.
- 1. Mzanzi-Ndizvo (Pty) is a vaccine manufacturing company that has the following costs ofproduction. Cost of capital is R50 000, labour cost is R30 000, and the total cost the firm is willing to pay is R300,000. Identify the type of this production function and Illustrate it with a 2D graph. 2. If the demand and supply curve for cell phones is given by: D = 80 - 4P, S = 40 + 6P In a market with a price of P for smartphones, compute the number of phones that would be bought and sold at equilibrium.(ALL OWNERSHIP GOES TO CENGAGE) The government is considering levying a tax of $120 per unit on suppliers of either pickleball paddles or metro cards. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for pickleball paddles is shown by DP (on the first graph), and the demand for metro cards is shown by DM (on the second graph). Suppose the government taxes pickleball paddles. The following graph shows the annual supply and demand for this good. It also shows the supply curve (S+Tax) shifted up by the amount of the proposed tax ($120 per paddle). On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for pickleball paddles. Then use the black triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax. (image is below) Instead, suppose the government taxes metro cards. The following graph shows the annual supply…2. The supply Qs = s(P, Pm) has the functional form of: Qs = -12 + 0.5P - 2Pm initially, the materials cost Pm_0 = 7. Find the optimal quantity to supply if the price is P=76 and P=80. At P=76, Q_0 = . At P=80, Q_0 = . 3. Now, the cost of materials changes to Pm_1 = 9. Find the optimal quantity to supply if the price is P=76 and P=80. At P=76, Q_1 = At P=80, Q_1 = Draw the second supply curve and show how supply shifted.
- 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.A market has a demand function given by theequation Qd = 180 - 2P, and a supply function isgiven by the equation Qs = -15 + P. The marketis government-regulated, with price support per unit and production quotas. (NOTE: A production quota restricts the quantity of the good that can be produced. Firms are not allowed to produce more than the quota)(a) If the price is $72 per unit, what production quota is needed to ensure no shortages or surpluses? (HINT: Sketch the supply and demand equations.)(b) Considering the price support and the quota, calculate(i) the consumer surplus,(in) the producer surplus,(In) deadweight loss,Due to good weather, there is an increase in the demand for the good. The new demand equationis Qd = 190 - 2P. The government is trying todecide between two options:• Maintain the number of quotas and let the market adjust, or• Maintain price support and increase the number of quotas.Crinnamathemarinenidanidan maintain Suppose the government decides to maintain the…Suppose that the inverse demand for a downstream firm is P = 150 - Q. Its upstream division produces a critical input with costs of CU(Qd) = 5(Qd)2. The downstream firm's cost is Cd(Q) = 10Q. When there is no external market for the downstream firm's critical input, the downstream firm should produce:
