Suppose the equilibrium price in the market is $60 and the marginal revenue associated with the...
Suppose the equilibrium price in the market is $60 and the marginal revenue associated with the linear (inverse) demand function is $20. Then we know that the own price elasticity of demand is: -2 2 -1.5 It cannot be determined from the information contained in the question.
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Suppose the equilibrium price in the market is $60 and the
marginal revenue associated with the...
A firm can sell 10 gizmos when the market price is £40 and can sell 60...
A firm can sell 10 gizmos when the market price is £40 and can sell 60 gizmos when the market price is £15. The firm faces constant marginal cost of £15, with no other costs of production a) Assuming demand is linear, find the market demand function for gizmos and the associated inverse demand function. b) Determine the price elasticity of demand when the market price is £40. c) Suppose the firm is a monopolist in this market. i.) Explain...
A firm can sell 10 gizmos when the market price is £40 and can sell 60...
A firm can sell 10 gizmos when the market price is £40 and can sell 60 gizmos when the market price is £15. The firm faces constant marginal cost of £15, with no other costs of production a) Assuming demand is linear, find the market demand function for gizmos and the associated inverse demand function. b) Determine the price elasticity of demand when the market price is £40. c) Suppose the firm is a monopolist in this market. i.) Explain...
4 Suppose that you work as an anti-trust economist for the Department of Justice of the...
4 Suppose that you work as an anti-trust economist for the Department of Justice of the U.S. Your research division is investigating an anti-trust case of a major cigarette company. Given the following information: Price elasticity of demand for cigarettes at current prices is-0.5 Current price of cigarettes is $0.05 per cigarette. Cigarettes are being purchased at a rate of 10 million per year. (a) Find a linear demand function that fits this information b) Using the inverse elasticity pricing...
QUESTION 11 Consider the following table: Quantity Price Marginal Revenue TC ATC MC Suppose that the...
QUESTION 11 Consider the following table: Quantity Price Marginal Revenue TC ATC MC Suppose that the firm competes in a perfectly competitive market. Suppose that you observe the firm maximizing its profit at 8 units of output. Determine the market price and the firm's corresponding profit. O Price is 8, and profit is 27 O Price is 6, and profit is 14 O Price is 4, and profit is O Cannot be determined from the information given.
What is the equilibrium price and quantity? Market Demand Price Market Supply 60 100 60 40...
What is the equilibrium price and quantity? Market Demand Price Market Supply 60 100 60 40 200 80 20 300 100 10 400 120 Equilibrium Price: _________ Equilibrium Quantity: _________ Question 2: Graphically, an equilibrium can be found where: A. at any price above the intersection of demand and supply curves. B. at any price below the intersection of the demand and supply curves. C. the intersection of the demand curve and the horizontal axis. D. the intersection of the...
The market for a medicine is in equilibrium at 80 thousand units a month. Each one...
The market for a medicine is in equilibrium at 80 thousand units a month. Each one is sold for $500. Suppose the own price elasticity of demand for this medicine is -0.8 and the price elasticity of supply is 1.5. a. Compute the slope and intercept coefficients for the linear supply and demand equations. b. If the government imposed a per unit subsidy of $40, what would be the new equilibrium price and quantity of this medicine? c. Calculate and...
The market for new vitamins is in equilibrium at 80 thousand units a month. Each one...
The market for new vitamins is in equilibrium at 80 thousand units a month. Each one is sold for $500. Suppose the own price elasticity of demand for the new product is -0.8 and the price elasticity of supply is 1.5 Compute the slope and intercept coefficients for the linear supply and demand equations. If the government imposed a per unit subsidy of $40, what would be the new equilibrium price and quantity of this medicine? Calculate and illustrate the...
Draw the demand and marginal revenue curves. Draw a vertical line at the market price. To...
Draw the demand and marginal revenue curves. Draw a vertical line at the market price. To the left of the vertical line, show the demand and marginal revenue curves for the firm before the elasticity shifted. To the right, show the demand and marginal revenue curves for the more inelastic assumption. Where does the kink in the demand curve occur? What happens to the marginal revenue curve?
Calculate the daily total revenue when the market price is $80, $70, $60, $50, $40, $30,...
Calculate the daily total revenue when the market price is $80, $70, $60, $50, $40, $30, $20, and $10 per bippitybop. Then, use the green point (triangle symbol) to plot the daily total revenue against quantity corresponding to these market prices on the following graph 1140 1045 950 855+ 760 665 570 475 380 285 190 95 Total Revenue 0 612 18 24 30 36 42 48 54 60 QUANTITY (Bippitybops per day) According to the midpoints formula, the price...
5. Suppose marginal revenue is positive (MR>0). What does that tell us about the demand elasticity...
5. Suppose marginal revenue is positive (MR>0). What does that tell us about the demand elasticity at that point? a. € > -1 b. € < -1 C. E= -1 d. The demand elasticity is unrelated to the marginal revenue curve. 6. If a single strategy is always optimal, regardless of opponents' strategies, then it is a a. First-mover advantage b. A Nash equilibrium c. Prisoners Dilemma d. A dominant strategy 7. In a market with a monopolist, which of...
A firm can sell 10 gizmos when the market price is £40 and can sell 60 gizmos when the market price is £15. The firm faces constant marginal cost of £15, with no other costs of production a) Assuming demand is linear, find the market demand function for gizmos and the associated inverse demand function. b) Determine the price elasticity of demand when the market price is £40. c) Suppose the firm is a monopolist in this market. i.) Explain...
A firm can sell 10 gizmos when the market price is £40 and can sell 60 gizmos when the market price is £15. The firm faces constant marginal cost of £15, with no other costs of production a) Assuming demand is linear, find the market demand function for gizmos and the associated inverse demand function. b) Determine the price elasticity of demand when the market price is £40. c) Suppose the firm is a monopolist in this market. i.) Explain...
4 Suppose that you work as an anti-trust economist for the Department of Justice of the U.S. Your research division is investigating an anti-trust case of a major cigarette company. Given the following information: Price elasticity of demand for cigarettes at current prices is-0.5 Current price of cigarettes is $0.05 per cigarette. Cigarettes are being purchased at a rate of 10 million per year. (a) Find a linear demand function that fits this information b) Using the inverse elasticity pricing...
QUESTION 11 Consider the following table: Quantity Price Marginal Revenue TC ATC MC Suppose that the firm competes in a perfectly competitive market. Suppose that you observe the firm maximizing its profit at 8 units of output. Determine the market price and the firm's corresponding profit. O Price is 8, and profit is 27 O Price is 6, and profit is 14 O Price is 4, and profit is O Cannot be determined from the information given.
Calculate the daily total revenue when the market price is $80, $70, $60, $50, $40, $30, $20, and $10 per bippitybop. Then, use the green point (triangle symbol) to plot the daily total revenue against quantity corresponding to these market prices on the following graph 1140 1045 950 855+ 760 665 570 475 380 285 190 95 Total Revenue 0 612 18 24 30 36 42 48 54 60 QUANTITY (Bippitybops per day) According to the midpoints formula, the price...
5. Suppose marginal revenue is positive (MR>0). What does that tell us about the demand elasticity at that point? a. € > -1 b. € < -1 C. E= -1 d. The demand elasticity is unrelated to the marginal revenue curve. 6. If a single strategy is always optimal, regardless of opponents' strategies, then it is a a. First-mover advantage b. A Nash equilibrium c. Prisoners Dilemma d. A dominant strategy 7. In a market with a monopolist, which of...
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