Suppose Hubert is the only seller in the market for bottled water and Clancy is the only buyer. The following lists show the value Clancy places on abottle of water and the cost Hubert incurs to produce each bottle of water:Clancy's ValueHubert's CostsValue of first bottle:$10Cost of first bottle:$1Value of second bottle: $7Cost of second bottle: $3Value of third bottle:$3Cost of third bottle:$7Value of fourth bottle: $1Cost of fourth bottle: $10The following table shows their respective supply and demand schedules:PriceQuantity Supplied Quantity DemandedMore than $10$7 to $101$3 to $722$1 to $313$1 or less4 Use Hubert's supply schedule and Clancy's demand schedule to find the quantity supplied and quantity demanded at prices of $2, $6, and $9. Enterthese values in the following table.PriceQuantity SuppliedQuantity Demanded26A price of_V brings supply and demand into equilibrium.At the equilibrium price, consumer surplus isSproducer surplus is $and total surplus is $If Hubert produced and Clancy consumed one less bottle of water, total surplus would vIf instead, Hubert produced and Clancy consumed one additional bottle of water, total surplus would

Consumer surplus is the difference between the highest price a consumer is willing to pay and the…

se Hubert's supply schedule and Clancy's demand schedule to find the quantity supplied and quantity demanded at prices of $2, $6, and $9. Enter ese values in the following table. Price Quantity Supplied Quantity Demanded 9. price of_▼ brings supply and demand into equilibrium. the equilibrium price, consumer surplus is s producer surplus is $ |, and total surplus is $ Hubert produced and Clancy consumed one less bottle of water, total surplus would instead, Hubert produced and Clancy consumed one additional bottle of water, total surplus would

se Hubert's supply schedule and Clancy's demand schedule to find the quantity supplied and quantity demanded at prices of $2, $6, and $9. Enter ese values in the following table. Price Quantity Supplied Quantity Demanded 9. price of_▼ brings supply and demand into equilibrium. the equilibrium price, consumer surplus is s producer surplus is $ |, and total surplus is $ Hubert produced and Clancy consumed one less bottle of water, total surplus would instead, Hubert produced and Clancy consumed one additional bottle of water, total surplus would

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter16: Bargaining

Section: Chapter Questions

Problem 8MC

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Assume that you are in the business of building houses in United Kingdom. You have analyzedthe market carefully, and you know that at a price of £120,000, you will sell 800 houses peryear. In addition, you know that at any price above £120,000, no one will buy your housesbecause the government provides equal-quality houses to anyone who wants one at £120,000.You also know that for every £20,000 you lower your price, you will be able to sell an additional200 units. For example, at a price of £100,000, you can sell 1,000 houses; at a price of £80,000,you can sell 1,200 houses; and so on.a. Sketch the demand curve that your firm faces.b. Sketch the effective marginal revenue curve that your firm faces.c. If the marginal cost of building a house is £100,000, how many will you build and whatprice will you charge? What if MC = £85,000?
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