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1. Let demand be P(Q) = 6 - 2. What is the price elasticity of demand...
1. Let demand be P(Q) = 6-Q. What is the price elasticity of demand at Q...
1. Let demand be P(Q) = 6-Q. What is the price elasticity of demand at Q = 4? a. E = - b. E= - 2 C. E = -4 d. ε = -2 2. Suppose we have 3 types of households each with private demand for a public good (like flood protection) of P1(Q) = 5, P2(Q) = 10 - Q, and P3(Q) = 20 – 2Q. What is the social demand curve for the range Q < 10?...
1. Let demand be P(Q) = 6 ---Q. What is the price elasticity of demand at...
1. Let demand be P(Q) = 6 ---Q. What is the price elasticity of demand at Q = 4? 1 a. E = — 4 1 C. b. E =- 2 E = -4 d. E = -2 2. Suppose we have 3 types of households each with private demand for a public good (like flood protection) of P (Q) = 5, P2(Q) = 10 - Q, and P3(Q) = 20 – 2Q. What is the social demand curve for...
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 monopolist practices third degree price discrimination by separating its customers into two groups: consumers under...
A monopolist practices third degree price discrimination by separating its customers into two groups: consumers under 65 and senior citizens. The monopolist's marginal oost is MC = 0.05q, where q is the total output in both markets. The marginal cost does not depend on the market in which the goods are sold. The demand curves are Adults: PA-25-1/6 x QA-25-0.1667 x QA Seniors: PS = 15-⅛xQs-15-0.125 x Qs ● . A. What is the total industry demand curve? (Rewrite each...
MLTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question (2...
MLTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question (2 points each). 1) Which of the following sellers is most able to perfectly price discriminate A) a clothing store C) a grocery supermarket B) the post office D) a college or university 2) When firms price discriminate they turn A) producer surplus; consumer surplus C) consumer surplus; profit into B) total cost; profit D) producer surplus; revenue 3) IE a firm faces a flat...
The inverse demand curve for a firm with market power is P = 120 – Q,...
The inverse demand curve for a firm with market power is P = 120 – Q, and its marginal cost is given by MC = 2Q. If the firm is able to practice perfect first-degree price discrimination (instead of behaving as a single-price monopolist), the deadweight loss will _________ (increase or decrease) from $ _______ to $ _______ .
1) Given the following demand function Q=8.5-p+0.1y a) Derive a formular for the price elasticity of...
1) Given the following demand function Q=8.5-p+0.1y a) Derive a formular for the price elasticity of demand and income elasticity of demand. b) find the elasticity if p=6 and y=1000 c) what will happen to price elasticity of demand if income varies. d) what will happen to income elasticity of demand if income varies. e) derive the total revenue function. show that the relationship between price and revenue depends on elasticity (Assume y = 0).
3. The market illustrated below has inverse demand p(Q) = 130 - 3Q and industry-wide marginal...
3. The market illustrated below has inverse demand p(Q) = 130 - 3Q and industry-wide marginal cost MCQ) = 10 + 2Q. If production is competitive, this is the market (inverse) supply curve. If production is consolidated under a monopolist, this is the monopolist's MC curve. a. Suppose there is a monopolist. Explain how marginal revenue for a monopolist is different than for a firm under perfect competition. Then derive the profit-maximizing market outcome (including the monopoly price and quantity...
A monopolist faces inverse demand P = on TC(Q) = cQ. (a) Find the optimal price,...
A monopolist faces inverse demand P = on TC(Q) = cQ. (a) Find the optimal price, P, and quantity, QM (b) Solve for the monopolist's optimal profits, TM (c) Graph the equilibrium and show consumer surplus, producer surplus and deadweight loss. Be 150 -3Q and total cost functi careful with the marginal cost curve. (d) Compute CS and PS. These will be functions of the cost parameter c. (e) Compute DWL. Similarly, it will be functions of the cost parameter...
34. The equation for a demand curve is P = 2/Q. What is the elasticity of...
34. The equation for a demand curve is P = 2/Q. What is the elasticity of demand as price falls from 5 to 4? What is the elasticity of demand as the price falls from 9 to 8? Would you expect these answers to be the same? REVIEW QUESTIONS 1x. Compare and contrast the four market structures: Perfect competition, Monopoly, Monopolistic competition, and Oligopoly
1. Let demand be P(Q) = 6-Q. What is the price elasticity of demand at Q = 4? a. E = - b. E= - 2 C. E = -4 d. ε = -2 2. Suppose we have 3 types of households each with private demand for a public good (like flood protection) of P1(Q) = 5, P2(Q) = 10 - Q, and P3(Q) = 20 – 2Q. What is the social demand curve for the range Q < 10?...
1. Let demand be P(Q) = 6 ---Q. What is the price elasticity of demand at Q = 4? 1 a. E = — 4 1 C. b. E =- 2 E = -4 d. E = -2 2. Suppose we have 3 types of households each with private demand for a public good (like flood protection) of P (Q) = 5, P2(Q) = 10 - Q, and P3(Q) = 20 – 2Q. What is the social demand curve for...
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 monopolist practices third degree price discrimination by separating its customers into two groups: consumers under 65 and senior citizens. The monopolist's marginal oost is MC = 0.05q, where q is the total output in both markets. The marginal cost does not depend on the market in which the goods are sold. The demand curves are Adults: PA-25-1/6 x QA-25-0.1667 x QA Seniors: PS = 15-⅛xQs-15-0.125 x Qs ● . A. What is the total industry demand curve? (Rewrite each...
MLTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question (2 points each). 1) Which of the following sellers is most able to perfectly price discriminate A) a clothing store C) a grocery supermarket B) the post office D) a college or university 2) When firms price discriminate they turn A) producer surplus; consumer surplus C) consumer surplus; profit into B) total cost; profit D) producer surplus; revenue 3) IE a firm faces a flat...
3. The market illustrated below has inverse demand p(Q) = 130 - 3Q and industry-wide marginal cost MCQ) = 10 + 2Q. If production is competitive, this is the market (inverse) supply curve. If production is consolidated under a monopolist, this is the monopolist's MC curve. a. Suppose there is a monopolist. Explain how marginal revenue for a monopolist is different than for a firm under perfect competition. Then derive the profit-maximizing market outcome (including the monopoly price and quantity...
A monopolist faces inverse demand P = on TC(Q) = cQ. (a) Find the optimal price, P, and quantity, QM (b) Solve for the monopolist's optimal profits, TM (c) Graph the equilibrium and show consumer surplus, producer surplus and deadweight loss. Be 150 -3Q and total cost functi careful with the marginal cost curve. (d) Compute CS and PS. These will be functions of the cost parameter c. (e) Compute DWL. Similarly, it will be functions of the cost parameter...
34. The equation for a demand curve is P = 2/Q. What is the elasticity of demand as price falls from 5 to 4? What is the elasticity of demand as the price falls from 9 to 8? Would you expect these answers to be the same? REVIEW QUESTIONS 1x. Compare and contrast the four market structures: Perfect competition, Monopoly, Monopolistic competition, and Oligopoly
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