Principles of Microeconomics, Student Value Edition (12th Edition)
12th Edition
ISBN: 9780134069609
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 13, Problem 2.3P
(a)
To determine
The graph on marginal cost and average cost.
(b)
To determine
Total revenue, total cost, and total profit.
(c)
To determine
(d)
To determine
Memo on monopoly.
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Competition and big tech firms
Big tech firms in digital markets are at the forefront of the public policy debate because of the central role they play in today's economy and society. A small number of firms dominate their respective markets, from online retailing to operating systems and from social networking to online search. These concentrations of economic power, along with concerns about anti-competitive conduct, have focused a lot of attention on these digital giants. Several of these firms have recently been or are currently under investigation by antitrust authorities in the USA, China and the European Union.
Choose one or two of these markets and describe the alleged problems facing competition. Is high concentration leading to high profits and harming consumers and social welfare or are these firms dominant because they are efficient and provide good value to consumers? What are the most appropriate policy responses?
A good selection of academic articles was published in a…
Assume a competitive industry is initially at its long-run equilibrium, given the inverse market demand and supply functions:
P = 25000 − 0.2Qd and P = 5000 + 0.3Qs
If all current firms in this market have identical cost structures and produce 50 units at their break-even point:
1- How many firms operate in this market at this point?
2- What is the profit maximizing quantity produced by each competitive firm?
Now, assume that the inverse demand for this product increases to P = 35000 − 0.2Qd, which leads to an entry of and additional number of firms whose cost structures are also identical to those who existed in the market before the increase in the demand. If the new long-run equilibrium price after both changes is 20000 cents:
3- How many new firms entered this market?
4- What is the value of the elasticity of supply at long-run market equilibrium?
5- Draw a fully-labeled graph that demonstrated the above changes at the firm and market levels, highlighting the long-run industry…
Assume a competitive industry is initially at its long-run equilibrium, given the inverse market demand and supply functions:
P = 25000 − 0.2Qd and P = 5000 + 0.3Qs
If all current firms in this market have identical cost structures and produce 50 units at their break-even point:
Now, assume that the inverse demand for this product increases to P = 35000 − 0.2Qd, which leads to an entry of and additional number of firms whose cost structures are also identical to those who existed in the market before the increase in the demand. If the new long-run equilibrium price after both changes is 20000 cents:
a- How many new firms entered this market?
b- What is the value of the elasticity of supply at long-run market equilibrium?
c- Draw a fully-labeled graph that demonstrated the above changes at the firm and market levels, highlighting the long-run industry supply curve
Chapter 13 Solutions
Principles of Microeconomics, Student Value Edition (12th Edition)
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