Determine consumers surplus

Reference no: EM1369947

1. Interferences such as rent controls and farm price supports reduce the efficiency of markets. In terms of the balance of Qd and Qs, how/why do they do this? Draw a supply & demand graph (or graphs) to illustrate your answer.

2. What is consumers surplus? Why does it exist? Why is consumers surplus at a maximum when the consumer purchases the quantity of a good at which P = MU.

3. Describe carefully what "input substitution" means in terms of different possible combinations of inputs capable of producing a given quantity of output. How does the rule MPPa/PRICEa = MPPb/PRICEb serve to guide a producer to the "correct" input combination?

4. In terms of the relationship between price and marginal revenue, what does it mean to say that the perfectly competitive firm is a "price taker"? Why is the profit-maximizing "price taking" perfectly competitive firm the ideal or standard of economic efficiency?

Reference no: EM1369947

Questions Cloud

Show important information about restructuring : Important information about Restructuring - "Restructuring" is a popular management technique in recent business experience within the United States.

Discussion of opportunity costs : Master Card has a series of cute commercials that list a series of accounting items and costs leading to the priceless product. Cell phones are often advertised as being free.

Explain enterprise architecture using zachman framework : In your opinion, does framework necessarily lead to the top-down approach to development, e.g. you start with models in row 1, then work on row 2 models, and so on?

Determining output-price and profits : As a monopoly, compute Quick Tax's output, price, and profits at the profit-maximizing activity level.

Determine consumers surplus : Interferences such as rent controls and farm value supports reduce efficiency of markets. In terms of the balance of Qd and Qs, explain why do they do this?

Analysis of simulation : Make a solution using strategic variables available to you to sustain the economic profits firm can earn. What are some of pricing strategies which you would recommend? What are some of the nonpricing strategies which you would recommend?

Write c function to sort one dimensional integer array : Consider the values sorted in the array. Sort it in ascending order using Bubble sort technique showing all iterations: write C function to sort one dimensional integer array in ascending order.

Compute the equilibrium price and quantity : Assume you are given the following information about a particular industry, Determine the equilibrium price, the equilibrium quantity, output supplied by the firm, and the profit of each firm.

Determining optimal price and output : Suppose the two firms act as perfect competitors and try to out compete each other and do not collude, what would be the optimal industry price and output?

User Account

All Pages