1 the widget industry in anytown is a monopoly controlled

Assignment Help Microeconomics
Reference no: EM13374802

1. The widget Industry in Anytown is a monopoly, controlled by Widget Corp. Its demand curve for the local market is given by

P = 800 - 20 W

Where W represents the number of widgets sold per period.

The total cost function (including opportunity or implicit costs) for Widget Corp. is

TC = 300 + 500 W + 10 W2

a. Assuming the industry is unregulated, what are the equilibrium price and output and economic profits earned by Widget Corp.?

b. If the industry is regulated and the regulatory authority forces Widget Corp. to earn only a normal return on investment (which is included in its cost function), what is the resulting equilibrium price and quantity?

c. What happens to consumer surplus? What happens t o the economic profits earned by Widget Corp.?

Reference no: EM13374802

Questions Cloud

Neoclassical economics was a crucial stage in the creation : neoclassical economics was a crucial stage in the creation of a genuinely scientific unified theory of economic
1 staple all pages of your homework together2 type your : 1. staple all pages of your homework together.2. type your homework.3. if you want the final exam grade to replace
1 the kingdom of tradia is a small open export-oriented : 1. the kingdom of tradia is a small open export-oriented country. suppose initially that the world price of stuff is
The california instruments corporation a producer of : the california instruments corporation a producer of electronic equipment makes pocket calculators in a plant that is
1 the widget industry in anytown is a monopoly controlled : 1. the widget industry in anytown is a monopoly controlled by widget corp. its demand curve for the local market is
Consider our standard formula for gdp ycigx additionally : consider our standard formula for gdp ycigx. additionally note that consumption is given by c aby-t where t -200.2y.
Discuss the various ways governments can handle : discuss the various ways governments can handle externalities such as noise from a local airport or a barking dog or
Grocery stores and gasoline stations in a large city would : grocery stores and gasoline stations in a large city would appear to be examples of competitive markets there are
For immediate release information received since the : for immediate release information received since the federal open market committee met in september suggests that

Reviews

Write a Review

Microeconomics Questions & Answers

  What is the potential profit

If you can enter only one market, and the cost of entering the market is $250,000, should you enter one of the European markets. If you enter, what is your potential profit.

  Marshallian demand function

A firm has a cost function given by the following: Find the firm's production function, y= f(x1, x2).

  Development of value and distribution theories

A development of value and distribution theories. Detailed analysis of the reactions of consuming and producing units

  Produce the profit maximizing level of output and therefore

Produce the profit maximizing level of output and therefore there will be no deadweight loss associated with this production.

  Why monetary policy is carried out by the federal reserve

Monetary policy is carried out by the Federal Reserve. Describe how they use the three tools, reserve requirement, open market operations (Fed. Fund rates) and Discount Rates. Be sure to explain the players involved in each tool, the benefits of e..

  Rise in the price of widgets

How does an increase in the price of widgets affect the: And describe the effects in detail?

  Which effect dominates other-substitution or income effect

In labor markets, a change in wages has both an income and a substitution effect. An increase in wages causes an increase in real income; at the same time, the relative price of leisure increases for the worker. Supposse that an increase in the wa..

  The role of multinational corporations in business

About the role of Multinational Corporations in Business, Government and Society. the role of ethics in the global arena, the influence of governmental regulation, the roles of consumer, employee and environmental protection and how good corporat..

  Interpretation of lagrange multiplier

Use method of Lagrange multipliers to find the cost function c(r,w,y). Find out the average and marginal cost. Find out the interpretation of the Lagrange multiplier in part (a)? What is the importance of term (a+b) being less than, equal to, or grea..

  What changes have been made in regulating the industry

Regulations for the banking and financial industries have existed in the United States since the beginning of our country. Give a brief overview f the history of these regulations, focusing mostly on the great depression years of the 1930's.

  Find the equilibrium price and the equilibrium quantity

What is the solution to the firm's long-run cost-minimization problem given that the firm wants to produce Q units of output and long-run competitive equilibrium, how much output will each firm produce

  Does an increase in taxes raise or lower real gdp

On average, does an increase in taxes raise or lower real GDP If taxes as a percentage of GDP go up 1 percent, by how much does real GDP change Are the decreases in real DDP caused by tax increases temporary or permanent

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