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Question 1 a. Suppose the equilibrium price and quantity of bicycles is determined at RM40 and...
Suppose the apple market is competitive. a. State the long run equilibrium condition of a typical...
Suppose the apple market is competitive. a. State the long run equilibrium condition of a typical profit-maximizing firm operating in a competitive market. Express your answer using marginal cost and average cost. (2 marks) b. Assume the market for apple is now operating at her long run equilibrium. Draw side-by-side diagrams to show the long run equilibrium conditions for a typical apple farmer and the market for apples. Label your diagrams clearly. (6 marks) c. Recently, there is a fall...
1. What will happen to the equilibrium quantity and price of a product in a competitive...
1. What will happen to the equilibrium quantity and price of a product in a competitive market when the increase in demand exactly offsets the decrease in supply? A)Equilibrium quantity will increase and equilibrium price will decrease B)Equilibrium quantity will decrease and equilibrium price will increase C)Equilibrium quantity will increase and equilibrium price will stay the same D)Equilibrium quantity will stay the same and equilibrium price will increase 2. Which statement is not correct? A)If demand increases and supply decreases,...
1. Suppose there is a decrease in the price of gasoline. With the aid of a...
1. Suppose there is a decrease in the price of gasoline. With the aid of a demandand-supply diagram, explain how this will affect the equilibrium price and quantity in the market of gasoline cars. (6 marks) 2. Suppose the market for Japanese grapes is represented by: Supply: Q = 400 + P2 Demand: Q = 1000 – 5P2 i) Find the market equilibrium price and quantity. ii) Calculate the price elasticity of demand when the market is at the equilibrium....
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.
Question 3: (45 marks] Suppose the price-setting equation is given by P= (1+mW where m is...
Question 3: (45 marks] Suppose the price-setting equation is given by P= (1+mW where m is the markup. The wage-setting equation is given by W = pe? where z are unemployment benefts and u is the unemployment rate. 1. Derive the real wage and unemployment consistent with equilibrium in the labor market in the medium run. Is this the natural rate of unemployment? Does the equilibrium rate of unemployment change if unemployment benefts decrease? Explain? (8 marks] 2. Draw the...
Question 3: (45 marks] Suppose the price-setting equation is given by P= (1 + m)W where...
Question 3: (45 marks] Suppose the price-setting equation is given by P= (1 + m)W where m is the markup. The wage-setting equation is given by W = pe? where z are unemployment benefts and u is the unemployment rate. 1. Derive the real wage and unemployment consistent with equilibrium in the labor market in the medium run. Is this the natural rate of unemployment? Does the equilibrium rate of unemployment change if unemployment benefts decrease? Explain? (8 marks] 2....
Question Two [Total 50 marks] Suppose the market of carpets is competitive. The demand for and...
Question Two [Total 50 marks] Suppose the market of carpets is competitive. The demand for and the supply of carpets in the market have been estimated as follows: Demand: Qd = 6500 - 100P Supply: Qs = 1200P A typical firm producing carpets has a total cost function of C = 100+ 4.C and q stand for total cost and the output level of the firm respectively. a. Find the equilibrium market price and quantity of carpets. (5 marks] b....
3. Understanding changes in equilibrium price and quantity Suppose you are an analyst in the oil...
3. Understanding changes in equilibrium price and quantity Suppose you are an analyst in the oil refinery industry and are responsible for estimating the equilibrium price and quantity of home heating oil. To do so, you must consider factors that can affect the supply of and demand for heating oil. Determinants of the demand for heating oil include household income, the price of an oil furnace (a complementary good for heating oil), and the price of natural gas (a substitute...
QUESTION 25 Table 14-11 Suppose that a firm in a competitive Price Quantity Total cost Refer...
QUESTION 25 Table 14-11 Suppose that a firm in a competitive Price Quantity Total cost Refer to Table 14-11. The marginal revenue from producing the Sth unit equals (i) $6. (ii) the price. (iii) the marginal cost a. (i) only b.(i) and (ii) only c. (i), (ii), and (iii) d. (iii) only QUESTION 29 Suppose that a competitive market is initially in equilibrium. Then demand increases. If entering firms face the same costs as existing firms and sufficient resources are...
Suppose Qd=14-1/2*P and Qs= 1/4*P -1 Determine equilibrium price and quantity. Show graphically. If the price...
Suppose Qd=14-1/2*P and Qs= 1/4*P -1 Determine equilibrium price and quantity. Show graphically. If the price were $8 what would be the result in the market? What is the elasticity of demand at a price of $8?
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.
Question 3: (45 marks] Suppose the price-setting equation is given by P= (1+mW where m is the markup. The wage-setting equation is given by W = pe? where z are unemployment benefts and u is the unemployment rate. 1. Derive the real wage and unemployment consistent with equilibrium in the labor market in the medium run. Is this the natural rate of unemployment? Does the equilibrium rate of unemployment change if unemployment benefts decrease? Explain? (8 marks] 2. Draw the...
Question 3: (45 marks] Suppose the price-setting equation is given by P= (1 + m)W where m is the markup. The wage-setting equation is given by W = pe? where z are unemployment benefts and u is the unemployment rate. 1. Derive the real wage and unemployment consistent with equilibrium in the labor market in the medium run. Is this the natural rate of unemployment? Does the equilibrium rate of unemployment change if unemployment benefts decrease? Explain? (8 marks] 2....
Question Two [Total 50 marks] Suppose the market of carpets is competitive. The demand for and the supply of carpets in the market have been estimated as follows: Demand: Qd = 6500 - 100P Supply: Qs = 1200P A typical firm producing carpets has a total cost function of C = 100+ 4.C and q stand for total cost and the output level of the firm respectively. a. Find the equilibrium market price and quantity of carpets. (5 marks] b....
3. Understanding changes in equilibrium price and quantity Suppose you are an analyst in the oil refinery industry and are responsible for estimating the equilibrium price and quantity of home heating oil. To do so, you must consider factors that can affect the supply of and demand for heating oil. Determinants of the demand for heating oil include household income, the price of an oil furnace (a complementary good for heating oil), and the price of natural gas (a substitute...
QUESTION 25 Table 14-11 Suppose that a firm in a competitive Price Quantity Total cost Refer to Table 14-11. The marginal revenue from producing the Sth unit equals (i) $6. (ii) the price. (iii) the marginal cost a. (i) only b.(i) and (ii) only c. (i), (ii), and (iii) d. (iii) only QUESTION 29 Suppose that a competitive market is initially in equilibrium. Then demand increases. If entering firms face the same costs as existing firms and sufficient resources are...
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