Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 13, Problem 19APA
To determine
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Use the table below to answer the question.
The Waco Kid's Cowboy Hats
Marginal Cost (dollars)
1st hat
$24
2nd hat
30
3rd hat
38
4th hat
46
The table above lists the marginal cost of cowboy hats by The Waco Kid, a firm that specializes in producing western wear. If the market price of The Waco Kid's cowboy hats is $40, then
Group of answer choices:
producer surplus will equal $28.
there will be a surplus; as a result, the price will fall to $24.
producer surplus will equal $24.
producer surplus from the first hat will equal $40.
Complete the table and answer the following:
1. Sketch a graph of the table
2. Compute consumer surplus, producer surplus, and deadweight loss.
3. If the movie theater industry were perfectly competitive, how many tickets would be sold and what would be the price of each ticket? [competitive outcome, (Pcomp, Qcomp)]
Competitive price: $___ per ticket
Competitive output: ___ tickets
Draw a market graph showing a downward-sloping demand curve and a horizontal supply curve. The firm graph would show a U-shaped average cost curve and a marginal cost curve that intersects the average cost curve at its minimum point. The firm would be producing at the profit-maximizing level of output, where marginal cost equals price.
Chapter 13 Solutions
Macroeconomics
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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- Is there a deadweight loss if a firm produces the quantity of output at which price equals marginal cost? Explain.arrow_forwardAs the only producer in the apple market, at what price, how many apples would Alex sell per week in order to maximize his economic profit? Calculate his producer surplus.arrow_forwardAsap plz 1) A food industry is made up of 100 identical companies. Each firm has a short-run cost function which is the square of its output, which is SC = 0.5 q2 + 10q + 5. If the total market demand for the food is Q = 1100 – 50P, Questions: a. Calculate and Draw a graph showing the market point equilibrium b. Calculate how much is the consumer surplus? c. Calculate how much is the producer surplus ?arrow_forward
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