EBK MICROECONOMICS
12th Edition
ISBN: 8220100659454
Author: PARKIN
Publisher: PEARSON
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Chapter 13, Problem 10APA
To determine
The cases when the
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Pricing at Montoya Steelworks
Montoya Steelworks
Montoya Steelworks is a fully integrated steel producer in Florin City in the small nation-state of
Florin. However, as a small steel firm, its costs are quite high: To make q tons of steel costs Montoya
2000 + 20q+q².
Demand for Steel
As the only steel producer in Florin, Montoya has a monopoly on selling steel within Florin's borders.
Demand for steel (in tons) in Florin is given by D (p) = 150 - PF, where pr is the price that Montoya
charges for each ton of steel.
Meanwhile, Montoya also has the option to sell steel in the nearby nation of Spain. The Spanish steel
market is extremely competitive, and the price of steel there is $100/ton. As Florin is a small steel
producer, Florin will not have any effect on the price of steel in Spain, regardless of the amount it
sells.
Optimizing Profits for Montoya
You must decide how much steel to produce and how much will be kept for local sale; your goal is to
maximize the profits of Montoya…
The following table shows the daily cost data and demand schedule for a typical firm producing board games in a monopolistically competitive market
in the short run.
Fill in the values in the Marginal Cost, Total Revenue, and Marginal Revenue columns in the following table and then answer the questions that follow.
Quantity
Price
(Board games) (Dollars per game)
Total Cost Marginal Cost
(Dollars) (Dollars)
Total Revenue
(Dollars)
Marginal Revenue
(Dollars)
Average Total Cost
(Dollars)
1
16.00
14.00
10.00
8.00
6.00
4.00
2.00
2
3
4
5
6
7
8
0.50
12
18
21
24
35
48
63
80
Under monopolistic competition, a typical firm will produce
Based on your calculations, the firm will
Fill in the Average Total Cost column in the previous table.
^^^^^^^
board games at a price of $
Based on your calculations, the level of excess capacity in this monopolistically competitive market is
per board game in the short run.
Marcella owns a sandwich shop. She decides to charge different prices to groups of customers. She targets one group of potential customers by giving them a discount coupon and the other group gets no coupons.
Which of the following would be a characteristic of the group that does NOT receive the discount coupon?
They _____ than the potential customers who receive coupons.
Select one:
a. have a lower reservation price
b. have a more elastic demand
c. receive equal marginal benefit from the product
d. have a less elastic demand
Chapter 13 Solutions
EBK MICROECONOMICS
Ch. 13.1 - Prob. 1RQCh. 13.1 - Prob. 2RQCh. 13.1 - Prob. 3RQCh. 13.2 - Prob. 1RQCh. 13.2 - Prob. 2RQCh. 13.2 - Prob. 3RQCh. 13.2 - Prob. 4RQCh. 13.3 - Prob. 1RQCh. 13.3 - Prob. 2RQCh. 13.3 - Prob. 3RQ
Ch. 13.3 - Prob. 4RQCh. 13.4 - Prob. 1RQCh. 13.4 - Prob. 2RQCh. 13.4 - Prob. 3RQCh. 13.4 - Prob. 4RQCh. 13.5 - Prob. 1RQCh. 13.5 - Prob. 2RQCh. 13.5 - Prob. 3RQCh. 13.5 - Prob. 4RQCh. 13 - Prob. 1SPACh. 13 - Prob. 2SPACh. 13 - Prob. 3SPACh. 13 - Prob. 4SPACh. 13 - Prob. 5SPACh. 13 - Prob. 6SPACh. 13 - Prob. 7SPACh. 13 - Prob. 8SPACh. 13 - Prob. 9SPACh. 13 - Prob. 10APACh. 13 - Prob. 11APACh. 13 - Prob. 12APACh. 13 - Prob. 13APACh. 13 - Prob. 14APACh. 13 - Prob. 15APACh. 13 - Prob. 16APACh. 13 - Prob. 17APACh. 13 - Prob. 18APACh. 13 - Prob. 19APACh. 13 - Prob. 20APACh. 13 - Prob. 21APACh. 13 - Prob. 22APACh. 13 - Prob. 23APACh. 13 - Prob. 24APACh. 13 - Prob. 25APA
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