Homework Answers
a) Given price taker. Thus perfectly competitive market. P=MC . Qi=30-4*5=10. Since 4 people total quantity is 4*10=40
Qi=20-5=15. Since 3 people , we have quantity 45. Thus total quantity is 85
b) Since fireworks can be enjoyed by all individuals even if one person buys, Thus price is 5. quantity is 10
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Suppose that the individual demand functions for a particular good are Q 30- 4P for 4...
Suppose Q D = 200 – 4P and Q S = 100 describe market demand and...
Suppose Q D = 200 – 4P and Q S = 100 describe market demand and market supply in a given market. Find the equilibrium price and quantity for this market. Graph both supply and demand for this market. Compute the consumer and producer surplus for this market. Give an example of a good in the real world that might be described by this graph
The following supply and demand functions describe the competitive market Q2+4P Q40-2P where Q and Q"...
The following supply and demand functions describe the competitive market Q2+4P Q40-2P where Q and Q" are the quantities supplied and demanded, and P is the market price. (c) Suppose the government sets a production ceiling of Q- 20. Graph the impact on this market. Hint: Label your graph carefully, but don't worry about drawing it exactly to scale. (d) Compute the new producer and consumer surplus in equilibrium with the production ceiling. Then compute the change in producer and...
Suppose the demand for a particular product can be expressed as Q = 100/p. Calculate the...
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Let the market demand for widgets be described by Q = 1000 − 50P. Suppose further...
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a. On the basis of the three individual demand schedules below, and assuming these three determine the collect...
a. On the basis of the three individual demand schedules below, and assuming these three determine the collective demand schedule on the assumption that the good is a public good. Instructions: Enter your answers as whole numbers Individual #1 Price Qd Individual #2 Price Individual #3 Price Demand Public Good Price Qd PO $8 -NM LINNNIIT II TIT b. Use the public demand schedule above and the following supply schedule to ascertain the optimal quantity of this public good. Quantity...
1. Suppose the inverse demand curves for Person A and Person B for a PUBLIC GOOD...
1. Suppose the inverse demand curves for Person A and Person B for a PUBLIC GOOD are given by PA-90 -0.30A Ps - 40 - 0.20 and that MC - $35. a Derive the market demand curve. b. Calculate the efficient market allocation (Can). c. Derive the efficient pricing scheme. (Hint: different prices for different individuals) d. If the individuals acted independently, how much of each good would each individual purchase in the market? c. How many total units would...
2) (30 pts) Suppose that the market demand for soft drinks in a small town in...
2) (30 pts) Suppose that the market demand for soft drinks in a small town in Western Massachusetts is given as follows: P = 47-Q A firm producing soft drinks can do so at a marginal cost of $2 (per gallon). There is no fixed cost. Soft drinks are a homogenous good. a. What is the profit maximizing level of output and price of a monopolist? b. What will be the level of output and price in the market if...
Question 1 Suppose that the market demand curve and the market supply curve are described, respectively,...
Question 1 Suppose that the market demand curve and the market supply curve are described, respectively, by D(p) 240 3p and S(p) 5p. Compute the equilibrium price-quantity pair (p*,q*) (A) (20, 100) (B) (20, 180) (C) (30, 150) (D) (35, 135) (E) (40,200) Question 2 The setup is the same as in Question 1, except that the government now levies a quantity tax in the amount of $8 per unit of the good. Letting pf denote the price buyers pay...
The following graph shows the monthly demand functions for a particular good such as a particular...
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1. Suppose that Adam's willingness To Pay (WTP) for a shirt of a particular brand is...
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The following supply and demand functions describe the competitive market Q2+4P Q40-2P where Q and Q" are the quantities supplied and demanded, and P is the market price. (c) Suppose the government sets a production ceiling of Q- 20. Graph the impact on this market. Hint: Label your graph carefully, but don't worry about drawing it exactly to scale. (d) Compute the new producer and consumer surplus in equilibrium with the production ceiling. Then compute the change in producer and...
a. On the basis of the three individual demand schedules below, and assuming these three determine the collective demand schedule on the assumption that the good is a public good. Instructions: Enter your answers as whole numbers Individual #1 Price Qd Individual #2 Price Individual #3 Price Demand Public Good Price Qd PO $8 -NM LINNNIIT II TIT b. Use the public demand schedule above and the following supply schedule to ascertain the optimal quantity of this public good. Quantity...
1. Suppose the inverse demand curves for Person A and Person B for a PUBLIC GOOD are given by PA-90 -0.30A Ps - 40 - 0.20 and that MC - $35. a Derive the market demand curve. b. Calculate the efficient market allocation (Can). c. Derive the efficient pricing scheme. (Hint: different prices for different individuals) d. If the individuals acted independently, how much of each good would each individual purchase in the market? c. How many total units would...
2) (30 pts) Suppose that the market demand for soft drinks in a small town in Western Massachusetts is given as follows: P = 47-Q A firm producing soft drinks can do so at a marginal cost of $2 (per gallon). There is no fixed cost. Soft drinks are a homogenous good. a. What is the profit maximizing level of output and price of a monopolist? b. What will be the level of output and price in the market if...
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The following graph shows the monthly demand functions for a particular good such as a particular kind of pizza pertaining to two consumers; Mrs. Brown and Mr. Blue. Mr. Blue does not care that much for this kind of pizza. Mrs. Brown, on the other hand, loves this pizza and believes that it is the best invention in the history of humankind. Currently the price of this pizza is $14 per unit and they are both buying 10 pizzas per...
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