What happens to consumer surplus

Assignment Help Microeconomics
Reference no: EM13134175

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: EM13134175

Questions Cloud

What is the empirical formula of the compound : A 0.4647-g sample of a compound known to contain only carbon, hydrogen, and oxygen was burned in oxygen to yield 0.8635 g of CO2 and 0.1767 g of H2O.
Basics of break-even point : Once the break-even point is reached:
Define group on a benzene ring will be activating : What determines whether a group on a benzene ring will be activating or deactivating and ortho para
Find probability that selected x-value is in given interval : Find the probability that a randomly selected x-value from the distribution is in the given interval. Between 29 and 37.
What happens to consumer surplus : What happens to consumer surplus and what happens t o the economic profits earned by Widget Corp.?
Paragraphs about the gun control in college campuses : 3 paragraphs about the gun control in college campuses. Those paragraph just explain about why student should not be allowed to carry gun to school.
How many students expected to score in range : The mean is 75 and the standard deviation is 6. If 1200 students took the test, approx how many students would be expected to score between 69 and 81?
Explain conversion for a specific product : Conversion for a Specific Product, Indicate the reaction conditions you would employ to accomplish the following
Calculate the marginal propensity to consume : Calculate the Marginal Propensity to Consume - Furthermore you know that the marginal propensity to save (MPS)equals 0.4

Reviews

Write a Review

Microeconomics Questions & Answers

  Discuss the income and consumption relationship

Discuss and explain the income and consumption relationship make sure to describe marginal propensity to consume. If you received an extra dollar, how much of it would you spend?

  Implication of demand of law

Your are the chief economic advisor to the King of Terra. The king has observed that while the price of energy has increased 20 percent over the past five years, consumers have actually increased their energy consumption by 10 percent over the sam..

  Cost and average total cost of producing units

Assume the firm can produce 5000 units of out put by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing 5000 units of output?

  Forecast of companies future sales and revenue

Each class member shall prepare a written report concerning the performance of a company of their choice and based upon observation period, offer forecast of companies' future sales and revenue

  What is the current equilibrium level of gdp

An economy is currently in equilibrium and the following figures refer to elements in its national accounts and what is the current equilibrium level of GDP and what is the level of injections

  Monetary policy tools

Decribe how the Bank of Canada can affect interest rates and money supply in Canada. Be specific about the tools that are available to the Bank for such purposes.

  Proposals of new production process

Your manager comes in with three sets of proposals for a new production process. Each process employs three inputs: land, labor, and capital.

  How many apples and hotdogs will mathew buy

Mathew's utility function implies that the marginal utility of apples is 0.5vX/Y and the marginal utility of hotdogs is 0.5vY/X . How many apples and hotdogs will Mathew buy?

  Labor market indicator

Discuss why is it difficult to estimate who is and who is not in the labor force? What consequence does this have, if any, for the labor market indicator?

  Advertising relationship with demand

Consider two firms X and Y that produce identically tasting cold drinks. In order to raise the demand for its cold drink, firm X raise its advertisement outlay.

  What is the expected value of employees you hire

You need to hire some new employees to staff your startup venture. You know that potential employees are distributed throughout the population as follows

  Production function-perfect substitutes

Having a little trouble setting this problem up. Would appreciate the detailed set up and solution. A production function has 2 inputs - labor and capital. Both are perfect substitutes. Existing technology permits 1 machine to do work of 3 workers..

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