Chapter 12, Problem 3TY

Show a firm that is earning zero economic profits, but has some market power.  Then, assume this market power is entirely eliminated when a new competitor enters the market with the same technology and produces a perfect substitute.  Showing in your diagram how the firm must adjust its production level to most effectively compete with the new entering firm, explain why maintaining competition is important.

The marginal revenue for a perfectly competitive firm is equal to the marketprice. Why is this not the case for a monopolist?

Nousaku estimates that the total daily revenue of producing q units of KAGO basket is (R(q) = (102 - (675/q+4) - q) thousand yen. What is the marginal revenue when output is 6? Interpret your answer.

Bitcom, a manufacturer of electronics, estimates the following relation between marginal cost of production and monthly output: MC= $150+ 0.005Q    Assume Bitcom operates as a price taker in a competitive market. What is this firm’s profit-maximizing level of output if the market price is $175? Can it be done in Excel?

Your business, which has some market power, has the following demand (D), marginal revenue (MR), marginal cost (MC), and average cost (AC) curves. Move point E to label the profit-maximizing price and quantity for your firm.     If the goal of your business is to maximize profit, how much will it produce, and what price will it charge? -The business will exit the market because it is unable to cover its average costs. -The business will produce 40 units, and charge a price of $5. -The business will produce 30 units, and charge a price of $3. -The business will produce 30 units, and charge a price of $6.

Consider the following problem: Demand: q = 100-p Retailer: marginal cost of selling r = 10 per unit Manufacturer: marginal cost of producing = 40 per unit Neither firm faces any competitor Suppose now that the retailer and the manufacturer are separate firms.   Write down the profit function of the manufacturer if it sells to the retailer at w. You solved for the quantity the manufacturer will sell a minute ago, so you can use that in the profit function, and then you will have a profit function for the manufacturer that does not have p, but only has w in it. Solve for the optimal w for the manufacturer to charge and calculate the quantitysold under that w.

Based on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD: Demand: P=1,200−10QP=1,200−10Q Total Revenue: TR=1,200Q−10Q2TR=1,200Q−10Q2 Marginal Revenue: MR=1,200−20QMR=1,200−20Q Marginal Cost: MC=300+10QMC=300+10Q   where QQ indicates the number of copies sold and PP is the price in Ectenian dollars.      Complete the following table by finding the price and quantity that maximize the company's profit and the price and quantity that maximize social welfare. Scenario Price Quantity (Dollars) (DVDs) Maximizes the company's profit     Maximizes social welfare       The deadweight loss from the monopoly is   .   Suppose, in addition to the foregoing costs, the director of the film has to be paid. The company is considering four options: I. A flat fee of 2,500 Ectenian dollars II. 50 percent of the profits III. 150 Ectenian dollars…

Compared to the perfectly competitive industry, a monopoly    options:   provides a higher quantity.   provides exactly the same quantity.   charge the same price.   provides a lower quantity.

The price-demand equation for the production of bluetooth speakers is: p = 250 - 1/20x, for 0 is less than or equal to x and x is less than or equal to 5000 where x speakers can be sold at $p per each speaker. The cost to produce x speakers is given as C(x) = 150,000 + 30x, where both C(x) and p are represented in dollars ($).  - find the profit function and the marginal profit and interpret the quantity P'(4500) - find the marginal cost and interpret the quantity C'(3000) - find the revenue function and the marginal revenue and interpret the quantity R'(3000)