Bundle: Principles of Microeconomics, Loose-Leaf Version, 7th + Aplia, 1 term Printed Access Card
7th Edition
ISBN: 9781305135444
Author: N. Gregory Mankiw
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 17, Problem 1PA
Subpart (a):
To determine
Equilibrium price .
Subpart (b):
To determine
Calculation of marginal revenue.
Sub part (c):
To determine
Calculation of profit.
Subpart (d):
To determine
What would be the price and quantity of diamond in Russia and South Africa after formation of cartel.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
A large share of the world supply of diamonds comes from Russia and South Africa. Suppose that the marginal cost of mining diamonds is constant at $1,000 per diamond, and the demand for diamonds is described by the following schedule:
Price
Quantity
(Dollars)
(Diamonds)
8,000
5,000
7,000
6,000
6,000
7,000
5,000
8,000
4,000
9,000
3,000
10,000
2,000
11,000
1,000
12,000
If there were many suppliers of diamonds, the price would be___per diamond and the quantity sold would be___diamonds.
If there were only one supplier of diamonds, the price would be___per diamond and the quantity sold would be___diamonds.
Suppose Russia and South Africa form a cartel.
In this case, the price would be___per diamond and the total quantity sold would be___diamonds. If the countries split the market evenly, South Africa would produce___diamonds and earn a profit of___.
If South Africa increased its production by 1,000 diamonds while Russia stuck to the cartel…
A company manufactures Products A, B, and C. Each product is processed in three departments: I, II, and III. The total available labor-hours per week for Departments I, II, and III are 1020, 1080, and 900, respectively. The time requirements (in hours per unit) and the profit per unit for each product are as follows.
Product A
Product B
Product C
Dept. I
2
1
2
Dept. II
3
1
2
Dept. II
2
2
1
Profit
$18
$12
$15
If management decides that the number of units of Product B manufactured must equal or exceed the number of units of products A and C manufactured, how many units of each product should the company produce to maximize its profit?
A large share of the world supply of diamonds comes from Russia and South Africa. Suppose that the marginal cost of mining diamonds is constant at
$3,000 per diamond, and the demand for diamonds is described by the following schedule:
Price
Quantity
(Dollars)
(Diamonds)
8,000
3,000
7,000
4,000
6,000
5,000
5,000
6,000
4,000
7,000
3,000
8,000
2,000
9,000
1,000
10,000
If there were many suppliers of diamonds, the price would be $
per diamond and the quantity sold would be
diamonds.
If there were only one supplier of diamonds, the price would be $
per diamond and the quantity sold would be
diamonds.
Suppose Russia and South Africa form a cartel.
per diamond and the total quantity sold would be
diamonds and earn a profit of $
In this case, the price would be $
diamonds. If the countries split the market
evenly, South Africa would produce
Chapter 17 Solutions
Bundle: Principles of Microeconomics, Loose-Leaf Version, 7th + Aplia, 1 term Printed Access Card
Ch. 17.1 - Prob. 1QQCh. 17.2 - Prob. 2QQCh. 17.3 - Prob. 3QQCh. 17 - Prob. 1CQQCh. 17 - Prob. 2CQQCh. 17 - Prob. 3CQQCh. 17 - Prob. 4CQQCh. 17 - Prob. 5CQQCh. 17 - Prob. 6CQQCh. 17 - Prob. 1QR
Ch. 17 - Prob. 2QRCh. 17 - Prob. 3QRCh. 17 - Prob. 4QRCh. 17 - Prob. 5QRCh. 17 - Prob. 6QRCh. 17 - Prob. 7QRCh. 17 - Prob. 1PACh. 17 - Prob. 2PACh. 17 - Prob. 3PACh. 17 - Prob. 4PACh. 17 - Prob. 5PACh. 17 - Prob. 6PACh. 17 - A case study in the chapter describes a phone...Ch. 17 - Prob. 8PACh. 17 - Prob. 9PA
Knowledge Booster
Similar questions
- A large share of the world supply of diamonds comes from Russia and South Africa. Suppose that the marginal cost of mining diamonds is constant at $3,000 per diamond, and the demand for diamonds is described by the following schedule: Price Quantity (Dollars) (Diamonds) 8,000 3,000 7,000 4,000 6,000 5,000 5,000 6,000 4,000 7,000 3,000 8,000 2,000 9,000 1,000 10,000 If there were many suppliers of diamonds, the price would be______ per diamond and the quantity sold would be _______ diamonds. If there were only one supplier of diamonds, the price would be ______ per diamond and the quantity sold would be ______ diamonds. Suppose Russia and South Africa form a cartel. In this case, the price would be _____ per diamond and the total quantity sold would be _____ diamonds. If the countries split the market evenly, South Africa would produce _____ diamonds and earn a profit of _____ . If South Africa increased its production by 1,000 diamonds…arrow_forwardA large share of the world supply of diamonds comes from Russia and South Africa. Suppose that the marginal cost of mining diamonds is constant at $2,000 per diamond, and the demand for diamonds is described by the following schedule: Price Quantity (Dollars) (Diamonds) 8,000 2,000 7,000 3,000 6,000 4,000 5,000 5,000 4,000 6,000 3.000 7,000 2,000 8,000 1,000 9,000 If there were many suppliers of diamonds, the price would be S per diamond and the quantity sold would be diamonds. If there were only one supplier of diamonds, the price would bes per diamond and the quantity sold would be diamonds. Suppose Russia and South Africa form a cartel. In this case, the price would be S per diamond and the total quantity sold would be diamonds. If the countries split the market evenly, South Africa would produce diamonds and earn a profit of $ If South Africa increased its production by 1,000 diamonds while Russia stuck to the cartel agreement, South Africa's profit would to Why are cartel…arrow_forwarddo fast.all answersarrow_forward
- Each ton of ore mined from the ABC Mine produces 1 ounce of silver and 1 pound of lead. Marginal costs are $10 per ton of ore mined. The demand for silver is P_S = 11 – 0.00003Q_S and the demand for lead is P_L=0.4 – 0.000005Q_L where Q_S is ounces of silver and Q_L is pounds of lead. Calculate profit-maximizing sales quantities and prices for silver and lead. (hint: apply the marginal principle to aggregated revenues)arrow_forwardI need the answer as soon as possiblearrow_forwardDunkin’ Donuts assumes you, like all the other locally owned shops, will choose to close rather than compete, and they will have a monopoly on donut sales in your area. If they made that assumption, What quantity of donuts would they be most likely to sell to maximize profits? What price would they charge per donut?arrow_forward
- Given Question #1 Cost function C= 3000+6Q Q = 4400 - 200Q - This is the demand function Q= 1600 P = 14 Profit= 22400-12600 = 9800 Question #2 Q=$480 Q=$1120 Question #3 Ed=−1.25 Ed=−0.55 0.5<0.8− markup index it is charging less. 0.64<-1/-0.55--markup index it is charging less. Please answer question #5 A-C 5. Optimal price in San Antonio You decide to charge different prices in the two locations. To do this, you decide to use the demand functions you estimated in Q2 to calculate separate optimal prices in the two locations. For your costs in San Antonio, you have fixed costs of $2000 per week. In addition, it costs you six dollars per burger in variable costs (ingredients, labor etc.) A. What is your cost function in San Antonio? B. Using the demand function from Q2, calculate the profit maximizing price and quantity. Is the new price higher or lower than the price if you do not price discriminate? Is this consistent with your answer from Q3? C. What are your…arrow_forwardnot use ai pleasearrow_forwardA large share of the world supply of diamonds comes from Russia and South Africa. Suppose that the marginal cost of mining diamonds is constant at $1,000 per diamond and the demand for diamonds is described by the following schedule:Price QuantityPrice Quantity$8,0005,000 diamonds7,0006,0006,0007,0005,0008,0004,0009,0003,00010,0002,00011,0001,00012,000a. If there were many suppliers of diamonds, what would be the price and quantity?b. If there were only one supplier of diamonds, what would be the price and quantity?c. If Russia and South Africa formed a cartel, what would be the price and quantity? If the countries split the market evenly, what would be South Africa's production and profit? What would happen to South Africa's profit if it increased its production by $1,000 while Russia stuck to the cartel agreement?d. Use your answers to part (c) to explain why cartel agreements are often not successful.arrow_forward
- Question Road Runner Co is a Pakistani manufacturer making Bicycles. It exports to two markets,Bangladesh and Sri Lanka. Demand for Bicycles in thesetwo markets is given by the following Functions: Bangladesh Q1 = 12 – P1 Sri Lanka Q2 = 8 – P2 Where Q1 and Q2 are respective quantities sold (in thousands) andP1 and P2 are the respective prices (in Pak. Rupees per unit) in the two markets. Total cost function is C = 5 + 2 (Q1+ Q2) Now consider two cases (i) Company is effectively able to price discriminate in the two markets. What will be the total profits? (ii) Suppose the company does not engage in price discrimination. By charging the same price in the two markets what are the profit maximizing levels of price, output, and the total profits? c. Analyze, with graphs, the two alternative pricing strategies…arrow_forwardRoad Runner Co is a Pakistani manufacturer making Bicycles. It exports to two markets,Bangladesh and Sri Lanka. Demand for Bicycles in thesetwo markets is given by the following Functions: Bangladesh Q1 = 12 – P1 Sri Lanka Q2 = 8 – P2 Where Q1 and Q2 are respective quantities sold (in thousands) andP1 and P2 are the respective prices (in Pak. Rupees per unit) in the two markets. Total cost function is C = 5 + 2 (Q1+ Q2) (i) Company is effectively able to price discriminate in the two markets. What will be the total profits? (ii) Suppose the company does not engage in price discrimination. By charging the same price in the two markets what are the profit maximizing levels of price, output, and the total profits? (iii) Analyze, with graphs, the two alternative pricing strategies available to the company.arrow_forwardRoad Runner Co is a Pakistani manufacturer making Bicycles. It exports to two markets,Bangladesh and Sri Lanka. Demand for Bicycles in thesetwo markets is given by the following Functions: Bangladesh Q1 = 12 – P1 Sri Lanka Q2 = 8 – P2 Where Q1 and Q2 are respective quantities sold (in thousands) andP1 and P2 are the respective prices (in Pak. Rupees per unit) in the two markets. Total cost function is C = 5 + 2 (Q1+ Q2) Determine the company’s total profit function. Also, (i) What are the profit maximizing levels of price and output for the two markets? (ii) Calculate the marginal revenues in each market. Now consider two cases: (i) Company is effectively able to price discriminate in thetwo markets. What will be the total profits? (ii) Suppose the company does not engage in price discrimination. By charging thesameprice in the two markets what are the profit…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning