How much polyglue should alchem produce

Assignment Help Microeconomics
Reference no: EM13183601

Alchem (L) is the price leader in the polyglue All 10 other manufacturers (follower [F] firms) sell polyglue at the same price as Alchem. Alchem allows the other firms to sell as much as they wish at the established price and supplies the remainder of the demand itself. Total demand for polyglue is given by the following function (Qt = Ql + Qf): P=20,000-4Qt

Alchem's marginal cost function for manufacturing and selling polyglue is: MCl = 5,000 + Ql.

The aggregate marginal cost function for the other manufacturers of polyglue is: (Sigma)

MCf = 2,000 + 4Qf

a. To maximize profits, how much polyglue should Alchem produce and what price should it charge?

b. What is the total market demand for polyglue at the price established by Alchem in Part (a). How much of the total demand do the follower firms supply?

Reference no: EM13183601

Questions Cloud

Explain the use of determinants of elasticity : Why is the concept of elasticity important? What does it tell economists? Tell whether you would classify automobile production as either elastic or inelastic in the short run and long run. (Keep in mind that we are talking here about supply elas..
If it decreases the price will revenue increase : The Teenager Company makes and sells skateboards at an average price of $70 each. During the past year, they sold 4,000 of these skateboards. The company believes that the price elasticity for this product is about -2.5. If it decreases the price ..
Why contractionary policies are unpopular : A political commentator argues: "Congress and the President are more likely to enact an expansionary fiscal policy than a contractionary fiscal policy because expansionary policies are popular and contractionary policies are unpopular". Explain..
What open market policy would recommend to increase income : Say that investment increases by 100 for each interest rate drop of 1 percent. Say also that the expenditures multiplier is 3. If the money multiplier is 5, and each 5-unit change in the money supply changes the interest rate by 1 percent, what op..
How much polyglue should alchem produce : Alchem (L) is the price leader in the polyglue All 10 other manufacturers (follower [F] firms) sell polyglue at the same price as Alchem. Alchem allows the other firms to sell as much as they wish at the established price and supplies the remaind..
Explain absolute macroeconomic equilibrium : Explain and illustrate what is expected to happen to an economy in "absolute macroeconomic equilibrium when, ceteris paribus, there is an established concerted policy to bring down loanable interests rates. Use both, the Aggregate Expenditure grap..
The total fixed operating costs per month : Using the high-low method, estimate - The variable cost per occupied bed on a daily basis and the total fixed operating costs per month.
Find the monopolists profit-maximizing price : Suppose the demand curve for a monopolist is QD = 250. - .25P,and the marginal revenue function is MR = 1000 - 8Q.The monopolist has a constant marginal and average total cost of $45 per unit. Find the monopolist's profit-maximizing price.
Variation in electrical costs from month to month : Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1,200 and the variable cost per cup of coffee served is $0.22.

Reviews

Write a Review

 

Microeconomics Questions & Answers

  What is the selling price for the product

A manufacturing company leases a machine for $31,812 per year. Each unit produced costs $36 in labor and $72 in materials. To break even, 21,000 units must be sold. What is the selling price for the product

  Explain the four market structures

Explain the price elasticity of demand in each market structure and its effect on pricing of its products in each market. The four market structures are monopoly, Perfect competition, oligopoly, and monopolistic competition.

  Total cost-average cost-profit calculations

Find out the total revenue (TR) and total profits in terms of Q. At what level of output (Q) are total profits maximized? What price will be charged? What are total profits at this output level?

  Why do people hold their wealth in the form of money

Why do people hold their wealth in the form of money rather than another asset that will provide a rate of return higher that the rate on return

  What is the present worth of this investment

Aerotron Electronics is considering purchasing a water filtration system to assist in circuit board manufacturing. The system costs $40,000. It has an expected life of 7 years at which time its salvage value will be $7,500. Operating and maintenan..

  Find the total revenue for united states

United States winter wheat production rise dramatically in 1999 after a bumper harvest. The supply curve shifted rightward; as a result, the value reduced and quantity demanded increased

  Average variable cost function

A firm has determined that its variable costs are given by the following relationship:

  Computing the expected dividends

New Light Corporation has just created a solar panel capable of generating 200 percent more electricity than any solar panel currently on the market. As a result, New Light is expected to experience a 15% yearly growth rate for the next 5 years.

  Demand for energy in the united states

The demand for energy in the United States is often described as persistently non-cyclical and not sensitive to prices effects. Describe the effect of each of the following on the demand or supply for gasoline.

  Importance of high frequency trading

Explain the meaning and importance of high frequency trading with a literature search and examples in 10 double -spaced pages in a Word document. APA style.

  How does heckscher-ohlin theory differ from ricardian theory

How does the Heckscher-Ohlin theory differ from Ricardian theory in explaining international trade patterns and the theory demonstrates how trade affects the distribution of income within trading partners. Explain.

  Discuss the effect of international trade on market

Describe each market structure discussed in the course (perfect competition, monopolistic competition, oligopoly, and monopoly) and discuss two of the market characteristics of each market structure. Identify one real-life example of a market struc..

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