One least-cost way to make wooden boxes, Macroeconomics

Assignment Help:

There is only one least-cost way to make wooden boxes for shipping tomatoes, and any firm that makes them has a cost function given by 2 TC q q = + + 200 .005 .The inverse market demand for boxes is given by P Q = ? 10 .005 . There is currently only one firm in the industry and it is able to act as a monopolist. (a) What is its output and what price does it charge for boxes? (b) What is the firm's profit at this output level? (c) Does the firm have any producer's surplus? Support your answer by calculating it. (d) What is the magnitude of consumer's surplus in this situation? 3. Suppose now that the firm in problem 2 can no longer exclude others from using the same technology and producing boxes, so the market structure changes from monopoly to perfect competition. (That is, assume that all firms produce at minimum average cost in equilibrium.) (a) What will the market price and quantity be? (b) What is the magnitude of consumer's surplus under this market structure? (c) What are the magnitudes of aggregate producer profits and producer's surplus? (d) Comparing the two market structures for this industry, which has a larger social surplus (sum of producer's and consumer's surplus)?


Related Discussions:- One least-cost way to make wooden boxes

What are the production elasticities of demand, The following Cobb-Douglas ...

The following Cobb-Douglas production function is used to describe the output generated by a local government maintenance agency. Q = αL β1 K β2 E β3 Where L represents numb

Economics, Malaysia’s Bank Negara has cut the country’s economic growth for...

Malaysia’s Bank Negara has cut the country’s economic growth forecast to between 4 and 5 percent for 2012, weighed down by Europe’s economic woes. Discuss ONE (1) demand-management

Secondary effects in addition to the direct effect, Subsidy programs are li...

Subsidy programs are likely to have a number of secondary effects in addition to the direct effect on dairy prices. What impact do you suppose farm subsidies are likely to have on

Balance of payment, derive balance of payment line graphically

derive balance of payment line graphically

Eco 372, what does a weaker dollar to a) raise inflation and contract the e...

what does a weaker dollar to a) raise inflation and contract the economy b) reduce inflation and contract the economy c) raise inflation and expand the economy d) reduce inflation

Conclude a hypothesis test, Will improving customer service result in highe...

Will improving customer service result in higher stock prices for the companies providing the better service? When a companys satisfaction score has improved over the prior years r

National income of india, project with introduction,aims and objectives,nee...

project with introduction,aims and objectives,need and importance,preparation of data and information,case study,problems,conclusion

Firms in the circular flow, We divide all firms into 3 categories: FR inclu...

We divide all firms into 3 categories: FR includes all firms which acquire raw material (iron ore, farm products and so on), FH all those that produce semi-manufactured goods (stee

What causes a demand curve to shift, What causes a demand curve to shift? ...

What causes a demand curve to shift? a. Changes into the Prices of Related Goods Substitutes Complements b. Changes into Income Normal Goods Inferio

Give brief introduction about interest rate, Give brief Introduction about ...

Give brief Introduction about Interest rate When you borrow money, you usually have to pay a fee for the loan. This fee is often called interest, particularly if the fee is pr

Write Your Message!

Captcha
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