Define the reservation price for the consumer and how it is related to the marginal benefit...
Define the reservation price for the consumer and how it is related to the marginal benefit for a consumer in a perfectly competitive market. Next define opportunity cost. Using these concepts explain how is the demand curve derived.
Homework Answers
Reservation Price refers to the maximum price a consumer is willing to pay for consuming commodity. Likewise, reservation price is minimum price that a sellers is ready to accept. Seller will not accept price less than reservation price.
Marginal benefit refers to the change in total benefit when one additional unit of good is consumed. These benefits keep on diminishing when consuming of commodity is increased.
Demand curve has downward slope towards the right. More Commodity is consumed when when price declines. Hence, consumer reservation price keeps on declining when more commodities are offered. Thus, demand is curve derived from marginal benefit.
Add Answer to:
Define the reservation price for the consumer and how it is
related to the marginal benefit...
D) Assuming this is a perfectly competitive market, explain how the supply curve of the steel...
D) Assuming this is a perfectly competitive market, explain how the supply curve of the steel market is derived. In your explanation, you need to explain the relationship between marginal cost, opportunity cost and reservation price, and how it determines the supply decisions made by the producer.
In a perfectly competitive market, the demand curve shows the O A. marginal benefit; marginal cost...
In a perfectly competitive market, the demand curve shows the O A. marginal benefit; marginal cost OB. utility; average cost O C. net benefit; net costs O D. economic surplus, opportunity cost received by consumers and the supplu curve shows the
The demand curve represents the reservation prices of each consumer in the marketplace. represents the marginal...
The demand curve represents the reservation prices of each consumer in the marketplace. represents the marginal benefit to consumers of each unit of the good. represents the sum of the individual demand curves of each market participant. All of the above are correct.
In a perfectly competitive market, if all fims face identical, constant marginal cost curves, then consumer...
In a perfectly competitive market, if all fims face identical, constant marginal cost curves, then consumer surplus is the area beneath the market demand curve and above the market clearing price. the area above the market demand curve and above the market clearing price. c the total area beneath the market demand curve. definitely zero.
A monopoly will not be able to perfectly price discriminate if A each consumer does not...
A monopoly will not be able to perfectly price discriminate if A each consumer does not reveal her reservation price B demand is very elastic C the firm's marginal cost curve is upward sloping D All of the above
Assume that a single price monopolist has a marginal cost curve given by MC=10+2Q. Further the...
Assume that a single price monopolist has a marginal cost curve given by MC=10+2Q. Further the demand curve that it faces is given by p=250-Q. Compared to a perfectly competitive industry with the same demand and cost equations, the loss in consumer surplus in this market equals: O 1600. 1800. O 1200 O 1400
ANSWER WITH EXPLANATION PLEASE A1) The demand will be _______________ if the consumer has _________ substitute...
ANSWER WITH EXPLANATION PLEASE A1) The demand will be _______________ if the consumer has _________ substitute goods to choose from A) more elastic; less B) more inelastic; more C) more elastic; more D) more inelastic; less A2) It is easiest for new firms to enter a A) Perfectly competitive market. B) Duopoly market. C) Oligopoly market. D) Monopoly market. A3) A perfectly competitive firm A) Has the market power to compete effectively. B) Is large enough relative to the market to be taken into account by competitors. C) Confronts a...
Statement 1: For a monopoly firm, the marginal revenue curve is the same as the demand...
Statement 1: For a monopoly firm, the marginal revenue curve is the same as the demand curve for its product. Statement 2: A monopolist uses the same profit maximization rule that the perfectly competitive firm uses. Both statements (1) and (2) are false. Both statements (1) and (2) are true. Statement (1) is true; statement (2) is false. Statement (1) is false; statement (2) is true. Which of the following is TRUE of the model of perfect competition? There are...
Suppose that leather is sold in a perfectly competitive industry. The industry short-run supply curve (marginal...
Suppose that leather is sold in a perfectly competitive industry. The industry short-run supply curve (marginal cost curve) is P = MC = 3Q. The demand for leather hides is given by Q = 60 − P. a. Find the equilibrium market price and quantity. b. Suppose that the leather tanning releases bad stuff into waterways. The external marginal cost is $5 per unit. Calculate the socially optimal level of output and price for the tanning industry. c. What are...
Suppose that leather is sold in a perfectly competitive industry. The industry short-run supply curve (marginal...
Suppose that leather is sold in a perfectly competitive industry. The industry short-run supply curve (marginal cost curve) is P = MC = 3Q. The demand for leather hides is given by Q = 60 − P. a. Find the equilibrium market price and quantity. b. Suppose that the leather tanning releases bad stuff into waterways. The external marginal cost is $5 per unit. Calculate the socially optimal level of output and price for the tanning industry. c. What are...
In a perfectly competitive market, the demand curve shows the O A. marginal benefit; marginal cost OB. utility; average cost O C. net benefit; net costs O D. economic surplus, opportunity cost received by consumers and the supplu curve shows the
The demand curve represents the reservation prices of each consumer in the marketplace. represents the marginal benefit to consumers of each unit of the good. represents the sum of the individual demand curves of each market participant. All of the above are correct.
In a perfectly competitive market, if all fims face identical, constant marginal cost curves, then consumer surplus is the area beneath the market demand curve and above the market clearing price. the area above the market demand curve and above the market clearing price. c the total area beneath the market demand curve. definitely zero.
Assume that a single price monopolist has a marginal cost curve given by MC=10+2Q. Further the demand curve that it faces is given by p=250-Q. Compared to a perfectly competitive industry with the same demand and cost equations, the loss in consumer surplus in this market equals: O 1600. 1800. O 1200 O 1400
Statement 1: For a monopoly firm, the marginal revenue curve is the same as the demand curve for its product. Statement 2: A monopolist uses the same profit maximization rule that the perfectly competitive firm uses. Both statements (1) and (2) are false. Both statements (1) and (2) are true. Statement (1) is true; statement (2) is false. Statement (1) is false; statement (2) is true. Which of the following is TRUE of the model of perfect competition? There are...
Most questions answered within 3 hours.
-
For the purposes of this assignment, you are to choose an
adaptive trait common to more...
asked 5 minutes ago -
Two identical flutes can play middle C (262 Hz) at 20◦C. How
many beats per second...
asked 14 minutes ago -
Potassium phosphate and calcium chloride react in a double
replacement reaction. To produce 1.0 moles of...
asked 8 minutes ago -
Sparky, Co. purchased land as a factory site for $600,000.
Sparky paid $42,000 to tear down...
asked 23 minutes ago -
A Chi-square distribution with 14 degrees of freedom is a
correct model for
Question 8 options:...
asked 53 minutes ago -
In a group of 45 mice, there are 10 that have a certain genetic
character. suppose...
asked 34 minutes ago -
Topic: Hydrogenic Atoms
The wavefunction of one of the d orbitals is proportional to sin
θ...
asked 34 minutes ago -
6. Suppose that the Bank of Canada conducts an open market
purchase of $2000 from a...
asked 49 minutes ago -
A) Suppose U=X∙Y3. Find X* and Y*.
B) Suppose U=X3∙Y. Find X* and Y*.
C) Suppose...
asked 57 minutes ago -
The only quantities of good 1 that Barbara can buy are 1 unit or
zero units....
asked 47 minutes ago -
c. Node Admittance matrix and its use in different calculations
of power transmission system. Display the...
asked 55 minutes ago -
Try to get the code down to less than 40 lines. (PYTHON)
import random
fave_number =...
asked 55 minutes ago