Under both perfect competition and monopoly, a firm will: shut down in the short run if price falls short of AVC. O is a price chooser and setter. maximize profit or minimize cost by setting MR = AC. earn economic profit in the long run. always earns a pure economic profit.
Q: The Fed sells $150 million of bonds to the public and also raises the required reserve ratio. What…
A: When Fed sells out the bonds in the market , this is the open market operation for raising fund.…
Q: This phrase is used to refer to policies which are aimed at introducing free market oriented…
A: Economic reforms are adjustments made to the economy in order to deregulate it and address the…
Q: 1. Suppose that the manager of a firm operating in a perfectly competitive market has estimated the…
A: We know that Total Cost = Fixed Cost + Variable Cost and Average Variable Cost = Variable…
Q: What are the Principles of Public Debt Management?
A: The process of establishing and executing a plan for managing the debt of the government so as to…
Q: A prolonged period in which investment prices fall and usually occur when the economy is in a…
A: Stocks are defined as the form of securities which give a share of the company to the shareholders.…
Q: Consider a Cournot duopoly, the firms face an (inverse) demand function: Pb=268-10Qb. The marginal…
A: Profit maximizing quantity is where MR = MC MR is the marginal revenue , MC is the Marginal Cost…
Q: Russia trades chocolate with France, where it is a staple. The government of Russia places a price…
A: A price floor is a strategy for controlling prices. A minimum price level is set for the market by…
Q: The U.S money supply (M1) is $1000 billion, broken down as follows: $400 billion in currency, $10…
A: The money supply is the total amount of money in circulation within an economy. Currency, printed…
Q: Taste of India is a small restaurant in a small cown. The owner of Taste of India marks up his…
A: Markup pricing of a good refers to the difference between its production plus marketing costs, and…
Q: Assume a monopolist faces a market demand curve P= 200 - Q and has the short-run total cost function…
A: The profit-maximizing output for the monopoly will be at a point where marginal revenue is and…
Q: What are the two kinds of Indian budget?
A: Budget is defined as a government document that contains the details on the revenue and expenditure…
Q: This “Rule of the Game” in the Plantation economy model, specifies the area of influence of the…
A: “Rule of the Game” in the Plantation economy model, specifies the area of influence of the Metropole…
Q: What are the objects of public debt?
A: Government commitments, particularly those indicated by securities, to pay specific sums to holders…
Q: Make the case for and against an independent Federal Reserve.
A: The central bank F is one of the powerful central banks in the world. Its primary function is to…
Q: Question 2 In microeconomic theory, the standard intuition tells us that employees will reduce…
A: The labor market can be compared to the goods market since both have similar demand and supply…
Q: Assume a closed economy in which disposable income starts at 1,000 and increases by 500; consumption…
A: Consumption function is the sum of autonomous consumption and consumption dependent on Income of…
Q: What are the causes of disfavourable terms of trade in underdeveloped countries?
A: The ratio of the index of export prices to the index of import prices is known as the terms of…
Q: Luxury Mills is a small producer of cashmere yarn, which it sells to clothing manufacturers for…
A: Breakeven point is the point where firm earns only normal profit and normal profit is the amount…
Q: 3. What happens to the good-market equilibrium output if the following event oc- curs in the…
A: A good market is said to be in equilibrium when the total demand(D) of goods is equal to the total…
Q: What is the payoff to firm i if the two firms engaged in collusion to maintain monopoly output and…
A:
Q: QUESTION 2 If firms are in Cournot equilibrium: each firm could increase profits by unilaterally…
A: Cournot Model is a type of Oligopoly market structure. In this, all the firms are selling identical…
Q: If I want to make 95% service level, average demand during lead time is 10, standard deviation…
A: The reorder point (ROP) is the lowest stock level that can be reached before prompting you to order…
Q: 4. Assume that the price changed from P1 to P2. Compute for the point elasticity and determine the…
A: Here, given information is: Initial price (P1): 25 Final price (P2): 32 Initial quantity demanded…
Q: Read the scenario and determine if it will change the supply or the demand of the market listed.…
A: A surplus exists when the amount supplied of an item or service exceeds the quantity required at…
Q: In the short run, when the firm produces zero units of output, then what is always equal to zero?
A: Meaning of Cost: The term cost refers to the situation under which a firm occurs various expenses…
Q: Malika's Pizzas is a takeout-only pizza parlor servicing the college campus of Santa Barbara that…
A: Production function shows the relationship between the inputs used and the output produced.…
Q: 1. Why we should be prioritize the Gender Equality?
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: 7.If a government policy or other external force moves a competitive market away from the…
A: Government intervention is defined as any action made by the government that has an impact on the…
Q: Assume a monopolist faces a market demand curve P=200-Q and has the short-run total cost function…
A: Monopoly describes a type of market structure that is present in the economy. One vendor and…
Q: Which of the following will cause a left shift in the aggregate demand curve? (Don't use diagram) a)…
A: The phrase "aggregate demand" refers to all of the customers' combined demand for all goods and…
Q: What stops oligopolists from acting together as a monopolist and earning the highest possible level…
A:
Q: An engineering analysis by net present worth (NPW) is to be made for the purchase of two devices A…
A: NPV of zero demonstrates that the financial income and output expected for a project will balance…
Q: What is the primary objective of multinational tax planning?
A: A very difficult but crucial part of doing company internationally is planning for multinational…
Q: How does the increase in interest rates raise the chances of a recession? How can we expect the…
A: The economic growth of a country is dependent on economic stability both within the country and…
Q: Consider the relative liquidity of the following assets: Assets 1. Your car 2. A $20 bill 3. A bond…
A: Liquidity refers to the ease with which an asset can be changed into currency. Liquidity of an asset…
Q: Suppose pizza(P) and hamburger(H) are perfect substitutes for Andy. He is always willing to…
A: Pizza (P) and hamburger (H) are perfect substitutes for consumer A. For consumer A, 1 H = 2 P
Q: he small nation of Capralia has an abundant stock of Pashmina goats, a breed that yields…
A: The difference between consumer willingness to pay and what he pays is consumer surplus(CS). The…
Q: Answer the following questions. List and describe the three primary functions of the Federal…
A: Reserve is the amount that is kept by the banks as a security to be used in case of financial crises…
Q: what are some things that should be exempt from tax
A: In a government Budget, Taxes are one of the major sources of Income. Taxes are charged either on…
Q: Which of the following statements is right? The marginal cost curve is the inverse shape of the…
A: Average Total Cost or ATC: ATC tend to be shaped like a Nike swoosh. At first is falls because of…
Q: Was this change an increase or decrease? As a result did the equilibrium price and quanity…
A: There is increase in demand if the demand curve shifts to right. There is decrease in demand when…
Q: Evaluate the view that the main goal of firms will always be cost minimization.
A: firm objective is to maximize the profit and it is calculated as the difference between revenue and…
Q: Consider the company that manufactures pens. To make the signature pens, the firm must pay the…
A: Total revenue is the product of price and quantity. Total cost is the sum of total fixed cost and…
Q: What are the principles of federal finance?
A: Federal finance refers to the assignment of the sources of revenue to the different levels of the…
Q: Price Qd Qs1 Qs2 $20 0 10 8 $18 1 9 7 $15 2.5 7.5 5.5 $12 4 6 4 $10 5 5 3 $5…
A: An externality is a benefit or expense that an individual experiences as a result of the creation or…
Q: A Loader cost Ph 2,115,000 to purchase. Fuel, oil grease, and minor maintenance are estimated to…
A: Introduction The annual value of a property is the sum for which a property is reasonably expected…
Q: You are given the following information about the Canadian economy. With every increase of one…
A: 1. Here given information is: Marginal tax rate: 12% Marginal propensity to import (MPI): 3%~0.03…
Q: (1) Suppose you work for Philippine Competition Commission and you find out that in province A, the…
A: As we can see from the above given cost functions for the two hospitals the reason as to why they…
Q: Which of the following is the least likely example of asymmetric information? a. King Solomon and…
A: Asymmetric Information basically refers to the situation in which there are two parties in the…
Q: If the dollar depreciates against the Indian rupee Indian imports to the U.S. become less expensive.…
A: Appreciation and depreciation of foriegn currency occur when exchange rate changes. And exchange…
Step by step
Solved in 3 steps
- A perfectly competitive firm charges a price that is O lower; more O lower; less O higher; more O higher; less and produces than a monopolist.QUESTION 5 Which of the following is true for monopoly and perfect competition? CA The demand for the individual firm's product is perfectly elastic. O B.Economic profits can OC.Marginal revenue is be sustained O D. Profits are maximized by producing at the level of output where marginal revenue is equal to marginal cost horizontal at the indefinitely over time. industry equilibrium price.Price, TR, MR O Quantity A B W Refer to the above graph for a firm in pure competition. Line B is horizontal because: 1) total revenue is greater than marginal revenue. 2) marginal revenue is greater than total revenue. 3) the firm has a perfectly inelastic demand curve. 4) the firm has a perfectly elastic demand curve.
- Price Panel B D KEL Quantity Price Price Panel A D Quantity Panel D D Quantity Price Panel C All the answers are correct. D Quantity Use the figure above. Which of the following statements is correct? O Panel B represents the typical demand curve for a perfectly competitive firm. O Panel A represents the typical demand curve for a perfectly competitive market. O Panel A represents the typical demand curve for a monopoly.Which of the following can make a positive profit in the short run? A perfectly competitive firm A monopoly . Both A and BPlease dont copy and paste the answers One of your former peers starts up a firm after graduating NYUAD. However, he didn’t take Markets so is unsure if he is behaving optimally. He’s asked you for help. His firm faces monopolistic competition, has diminishing returns to its inputs and uses a fixed input. He is producing at a quantity such that P=MC, and he makes a positive profit. a. Draw the Demand curve, MR, MC, and ATC reflecting this situation on a graph. Label the quantity, price and profit of the firm under his strategy. b. Is his strategy maximizing his profits? Explain how he would do so if not. Label the quantity, price and profit of the firm under the optimal strategy on your graph in part a. c. He asks you about what you predict might happen to his profits in the future. What do you expect will happen to profits in this industry as we go to long run and why? What is the key assumption of monopolistic competition that gives you your conclusion?
- 28. The following is a graph of a non-price discriminating monopoly in the short run. (a) What is the profit-maximizing level of output? (b) What is the economic profit? (c) What is the long- run equilibrium of this firm? £ P1 supernormal profit Q1 MR MC AC D=ARPrice and costs (dollars per book) 50 40 30 20 10 0 1 MR MC D 2 3 4 5 6 Quantity (thousands of books per year) Bob's Books is the only bookstore in town. The figure above shows the demand curve for books and Bob's Books' marginal revenue curve and marginal cost curve. Bob's Books maximizes its profit and sets the price of a book equal to revenue of and has total annualQUESTION 1 If your fixed costs are $10,000, your variable costs are $10,000, and your revenue is $15,000, what do you do? You should shut down the firm. O You should shut down in the long run, but stay open in the short run. You shouldn't worry about profit. You should stay open. O You should follow the law of demand and cut your sales. QUESTION 2 If the elasticity of a product is -1, the best thing to do is: O drop the price O raise the price O leave it alone O bring the elasticity up to a positive number QUESTION 3 Game theory: O is used mostly in monopoly markets O never occurs when markets are in equilibrium helps a firm make strategy decisions considering the actions of other firms O is how consumers make rational economic decisions
- Attempts 0 2. Calculating marginal revenue from a linear demand curve The blue curve on the following graph represents the demand curve facing a firm that can set its own prices. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. 160 140 120 100 A Demand 40 12 PRICE (Dollars per unit) 200 Keep the Highest 0/5 180 20 0 0 4 16 20 24 28 32 36 40 QUANTITY (Units) Graph Input Tool Market for Goods I Quanded (Units) Demand Price (Dollars per unit) 20 100.00 (?In the long run, each firm in monopolistic competition O A. has the same markup and excess capacity as it would if the market was perfectly competitive OB. makes as much economic profit as it would if it was a monopoly OC. creates the same deadweight loss as it would if it was a monopoly OD. makes zero economic profit M NextCompare and contrast the decision-making processes of a competitive firm versus a monopoly firm. a. The difference between C and M markets in terms of the (homogeneity or uniqueness of product, barriers to enter and number of firms). b. You must point to the difference in the demand curve for a C firm and that for a M firm. c You must refer to the long run profit (or not) of the C as well as M firm. d. You must point to whether C and M firms are efficient or NOT. Graphs are welcome, not manadatory.
