Firm individual output-equilibrium market price and quantity

Assignment Help Microeconomics
Reference no: EM13839492

Problem 1: Assume that the long run total cost function for each firm in a perfectly competitive industry is LRTC = q3 - 4q2 + 8q and the market demand function is Q = 2000 - 100p. Calculate:

a. Each firm's individual output

b. Equilibrium market price and quantity

c. Number of firms in the industry

d. Profit per firm

Problem 2: If a monopolist charges the same price for all of its output (i.e., it does not price discriminate), total revenue for the firm will be TR = P(Q)Q.

Show that:

a. Total revenue is maximized when prices and quantities are set so that demand elasticity is -1.

b. Explain why a monopolist would never produce at an output level at which demand elasticity is -1 (part 1). Or why a monopolist will always produce an output lower than which would maximize its total revenue? (part 2). (Hint: What is the objective of a monopolist?)

Reference no: EM13839492

Questions Cloud

Suppose the market interest rate for loanable funds : Institutions that function to connect one individual's savings another's investment decisions is in summation called the. Suppose the market interest rate for loanable funds is above the equilibrium level, this means the quantity of loanable funds: B..
Explain how the agency relationship was created : In your answer, explain how the agency relationship was created as well as two types of authority which the agent would possess. Provide specific examples to support your answer.
Estimate the instantaneous rate of change of the function : Estimate the instantaneous rate of change of the function
Strategic plan for becoming a more responsible citizen : You will prepare and submit a strategic plan for becoming a more responsible citizen. In the introduction to your paper, provide an historical overview and theoretical foundation for the practice of deliberative democracy and its responsible expre..
Firm individual output-equilibrium market price and quantity : Problem 1: Assume that the long run total cost function for each firm in a perfectly competitive industry is LRTC = q3 - 4q2 + 8q and the market demand function is Q = 2000 - 100p. Calculate:
Cournot-nash equilibrium output and profit of each firm : Consider a Cournot duopoly with the inverse demand p = 130 - Q. Both firms have constant marginal and average cost MC = AC = 10. Find the Cournot-Nash equilibrium output and profit of each firm. Calculate the con-sumer surplus and DWL.
Compute the gross profit of call option and of put option : Consider options on Microsoft stock. Suppose that there are call options with a strike price of $10 and put options with a strike price of $10, both with the expiration date of January 16th. Compute the gross profit (i.e. disregarding option premium)..
Identify the various hardball distributive tactics : Describe the elements and processes used or could be used to resolve these impasses. Identify the various hardball distributive tactics and responses to those tactics in an effort to resolve the conflict
Write a pascal program which reads price of an item : write a pascal program which reads price of an item

Reviews

Write a Review

Microeconomics Questions & Answers

  Explain fluctuations in the level of economic activity

Economic fluctuations (or business cycles) are fluctuations in the level of economic activity, relative to a long-term growth trend. Comparing and contrasting the economic fluctuation the United States has experiences from 1990 to current date.

  Address benefits and challenges of sending expatriates

Create a guide to leveraging expatriates. The guide should include four to six (4-6) sources that address benefits and challenges of sending expatriates to other countries.

  According to classical economists-involuntary unemployment

According to Classical economists, involuntary unemployment

  Part of the administrative burden of a tax

Part of the administrative burden of a tax is

  Economic policy or economic development from u.s history

Pick a economic policy or economic development from U.S history that interests you.

  Why does wal-mart have a cost advantage

When Wal-Mart locates in a smaller town, often the local retailers (e.g., hardware, clothing, and appliance stores) are unable to successfully compete and are driven out of business.

  What is the expected value of richard''s payoff if he buys

Richard is deciding whether to buy a state lottery ticket. Each ticket costs $1, and the probability of the following winning payoffs is given as follows: Probability Return .5 $0.00 2.5 $1.00 .2 $2.00 -05 $7.50

  How can a business overcome customers real issues

To some people technology seems very complex. If people perceive technology as too complex , they may not buy the products with the complex technology . How can a business overcome customers real issues concerning technology complexity.

  Output produced by the monopoly

If the federal government enacts a tax on a monopoly, how would expect the additional tax to affect the following Output produced by the monopoly or else.

  Systematic research review of an article

An example of an essay on Critique of Systematic Research Review of an article

  What is the relationship between exports and imports

At one time, it was believed that the way for a nation to prosper was to export as much as possible while importing as little as possible. More money would flow into a country than out of a country. Is this really a sound economic strategy

  Find out which of the major regulatory strategies adopted

government regulation principal regulatory mechanisms please respond to the followinga. determine which of the major

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd