Showing 1251 to 1260 of 6199 Questions
  • In a competitive market, the industry demand and supply curves are P = 200 - .2Qd and P = 100 + .3Qs, respectively.a. Find the market’s equilibrium price and output.b. Suppose the government imposes a tax of $20 per unit of output on all firms in the industry. What effect does this have on the industry supply curve? Find the new competi

  • In a perfectly competitive market, industry demand is given by Q =1,000 - 20P. The typical firm’s average cost is AC = 300/Q + Q/3.a. Confirm that Qmin = 30. (Set AC equal to MC.) What is ACmin?b. Suppose 10 firms serve the market. Find the individual firm’s supply curve. Find the market supply curve. Set market supply equal to market

  • Firm Z, operating in a perfectly competitive market, can sell as much or as little as it wants of a good at a price of $16 per unit. Its cost function is C = 50 + 4Q + 2Q2. The associated marginal cost is MC = 4 + 4Q and the point of minimum average cost is Qmin = 5.a. Determine the firm’s profit-maximizing level of output. Compute its

  • Demand for microprocessors is given by P = 35 - 5Q, where Q is the quantity of microchips (in millions). The typical firm’s total cost of producing a chip is Ci = 5qi, where qi is the output of firm i. a. Under perfect competition, what are the equilibrium price and quantity?b. Does the typical microchip firm display increasing, constan

  • In 2007, dairy farmers faced an (equilibrium) wholesale price for their milk of about 1 cent per ounce. Because of changes in consumer preferences, the demand for milk has been declining steadily since then.a. In the short run, what effect would this have on the price of milk? On the number of dairy farmers (and the size of dairy herds)?

  • In a competitive market, the industry demand and supply curves are P = 70 - QD and P = 40 + 2QS, respectively.a. Find the market’s equilibrium price and output.b. Suppose that the government provides a subsidy to producers of $15 per unit of the good. Since the subsidy reduces each supplier’s marginal cost by 15, the new supply curve

  • The market for rice in an East Asian country has demand and supply given by QD = 28 - 4P and QS = -12 + 6P, where quantities denote millions of bushels per day.a. If the domestic market is perfectly competitive, find the equilibrium price and quantity of rice. Compute the triangular areas of consumer surplus and producer surplus.b. Now su

  • In 1989, the Detroit Free Press and Detroit Daily News (the only daily newspapers in the city) obtained permission to merge under a special exemption from the antitrust laws. The merged firm continued to publish the two newspapers but was operated as a single entity.a. Before the merger, each of the separate newspapers was losing about $1

  • A pharmaceutical company has a monopoly on a new medicine. Under pressure by regulators and consumers, the company is considering lowering the price of the medicine by 10 percent. The company has hired you to analyze the effect of such a cut on its profits. How would you carry out the analysis? What information would you need?

  • The ready-to-eat breakfast cereal industry is dominated by General Mills, Kellogg, Kraft Foods, and Quaker Oats that together account for 90 percent of sales. Each firm produces a bewildering proliferation of different brands (General Mills alone has over 75 cereal offerings), appealing to every conceivable market niche. Yet, the lowest b