Pearson eText Microeconomics -- Access Card
2nd Edition
ISBN: 9780136849513
Author: Acemoglu, Daron, Laibson, David, List, John
Publisher: PEARSON
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Question
Chapter 6, Problem 11Q
To determine
The effect on firm’s
(a) When the product demand increases.
(b) When the firm’s marginal cost increases.
(c) When the market price falls.
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Students have asked these similar questions
Suppose the equilibrium price of a good in a perfectly competitive market is $15. A firm in the market decides to charge $20 for the good. Which of the following will happen?
a.
The firm's profit will increase.
b.
The firm will capture the entire market.
c.
The firm will not be able to sell any output.
d.
The firm's revenue will increase.
Consider the market for Blackberry cell phones. Assume the market is perfectly competitive and
at a market-clearing equilibrium.
What area represents consumer surplus?
1.) Use the triangle drawing tool to shade in consumer surplus. Label this area 'Consumer
Surplus.
What area represents producer surplus?
2.) Use the triangle drawing tool to shade in producer surplus. Label this area Producer Surplus".
Carefully follow the instructions above, and only draw the required objects.
Price of Blackberry cell phones
Quantity of Blackberry cell phones
Which market offers higher consumer surplus and why? The perfectly competitive firm
or the monopoly firm?
Chapter 6 Solutions
Pearson eText Microeconomics -- Access Card
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