1. Determine whether each statement beiow is true or false or uncertain and justify your answer...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1. Determine whether each statement beiow is true or false or uncertain and justify your answer (15p) a) "it is impossible for isoquants to be linear and downward sloping b) "Monopoly power must be thought of in a static context." c)"Competitive firms are price makers. 2. The owner of firm XYZ desires to minimize costs of production of a given level of output (e). The following diagram represents the isoquant curve (the dark curve labeled as q") and the isocost lines the three paralel straight- lines) of firm XYZ. In order to fulfil his/her desire the owner must select which point (A on the diagram? Why not any other point? Explain. (15p.) 3. Refer to the following figure. (15p.) SRUC LRMC LRAC OUTPUT a) At P= S80, find the profit maximizing level of output for this competitive fim in the short run. b) At P= S80, how much is profit in the short run? C) Determine the profit-maximizing level of autaut in the long-nan. 4. LARA is a producer in a monopoly industry. Her demand curve, total revenue curve, marginal revenue curve, total cost curve and marginal cost curve are given as follows: (15p) P- 12-Q [or, Q- 12-PI TR - 120-0 MR - 20-20 TC- 20-5Q MC - 8Q a) Find the profit-maximizing level of output for LARA b) Find the level of profit e) Should LARA exit the industry in the LR.? Why? Why not? S. A monopolist has set her level of output to maximize profit. The firm's morginal cost is $100, and the price elasticity of firm's demand is 5.0. (20p) a) Determine the firm's profit maximizing price b) Calculate and interpret Lerner's Index for this monopolist 6. Suppose your firm develops a new pharmaceutical product that may be used to reduce blood cholesterol levels, so the firm is the monopoly selier of this drug. If the elasticity of demand for this new product is 4, what markup (as % of the price) should your firm use to set the profit-maximizing price for the product? (20p) 1. Determine whether each statement beiow is true or false or uncertain and justify your answer (15p) a) "it is impossible for isoquants to be linear and downward sloping b) "Monopoly power must be thought of in a static context." c)"Competitive firms are price makers. 2. The owner of firm XYZ desires to minimize costs of production of a given level of output (e). The following diagram represents the isoquant curve (the dark curve labeled as q") and the isocost lines the three paralel straight- lines) of firm XYZ. In order to fulfil his/her desire the owner must select which point (A on the diagram? Why not any other point? Explain. (15p.) 3. Refer to the following figure. (15p.) SRUC LRMC LRAC OUTPUT a) At P= S80, find the profit maximizing level of output for this competitive fim in the short run. b) At P= S80, how much is profit in the short run? C) Determine the profit-maximizing level of autaut in the long-nan. 4. LARA is a producer in a monopoly industry. Her demand curve, total revenue curve, marginal revenue curve, total cost curve and marginal cost curve are given as follows: (15p) P- 12-Q [or, Q- 12-PI TR - 120-0 MR - 20-20 TC- 20-5Q MC - 8Q a) Find the profit-maximizing level of output for LARA b) Find the level of profit e) Should LARA exit the industry in the LR.? Why? Why not? S. A monopolist has set her level of output to maximize profit. The firm's morginal cost is $100, and the price elasticity of firm's demand is 5.0. (20p) a) Determine the firm's profit maximizing price b) Calculate and interpret Lerner's Index for this monopolist 6. Suppose your firm develops a new pharmaceutical product that may be used to reduce blood cholesterol levels, so the firm is the monopoly selier of this drug. If the elasticity of demand for this new product is 4, what markup (as % of the price) should your firm use to set the profit-maximizing price for the product? (20p)
Expert Answer:
Answer rating: 100% (QA)
It is impossible for isoquants to be linear and downward sloping This statement is tr... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Indicate whether each statement below is true or false. If false, explain why. a) To get a representative sample, you must sample a large fraction of the population. b) Using modern methods, it is...
-
Indicate whether each statement below is true or false. If false, explain why. a) We can eliminate sampling error by selecting an unbiased sample. b) Randomization helps to ensure that our sample is...
-
Indicate whether each statement below is true or false. If false, explain why. a) We can eliminate sampling error by selecting an unbiased sample. b) Randomization helps to ensure that our sample is...
-
One joule of work is done on a system, raising its temperature by one degree centigrade. Can this increase in temperature be harnessed to do one joule of work? Explain.
-
Define the following terms related to reciprocating engines: stroke, bore, top dead center, and clearance volume.
-
Through what three sources do companies tend to obtain the financial resources they need?
-
1. Identify 3 students to play the roles of the employees. Ask these 3 individuals to read their roles below. 2. Identify 1 student to play the role of the president of the social enterprise (Taylor...
-
Trendy Clothing, Inc., is a manufacturer of winter clothes. It has a knitting department and a finishing department. This exercise focuses on the finishing department. Direct materials are added at...
-
2. 16 points] Now consider a different system, +10x=u, where u is a "control input" that we can choose to make a behave the way we want. (a) What u would you choose so that r eventually ends up at...
-
A mortgage broker offers to sell you a mortgage loan contract delivering month-end payments of $900 for the next 2 3/4 years. At that point, the principal balance of $37,886 is due and payable. What...
-
What law applies in an international contract? What is the international currency? What is the WTO? What are the fundamental principles of the WTO? What are the various barriers to trade?
-
1 a. The elasticity of demand for Dy between points a and bis 1.80. Given the shift in demand, the elasticity between points a' and b'in Figure a =[ b. The elasticity of demand for D2 between points...
-
Given P(A) = 75, P(B) = .37 and P(AUB) = .90, a) Find P(A/B) 0.2775 Round your answer to 4 decimal places. b) Find P(A/B) Round your answer to 4 decimal places.
-
Explain the importance of the marketing mix the 4 P's and describe and discuss the 4 C's.
-
Give an example of a product with features that dont align with the purported benefits.
-
If a perfectly competitive firm is producing at a rate output where marginal cost exceeds price how can a firm increase its profit?
-
1. How might the differences between the single factor analysis and the portfolio classification translate to increased selling effectiveness and efficiency for Brenda?
-
Access the Federation of Tax Administrators Internet site at www. taxadmin.org/state-tax-forms and indicate the titles of the following state tax forms and publications: a. Minnesota Form M-100 b....
-
Suppose there has been a long-standing price ceiling on housing in your city. Recently, population has declined, and demand for housing has decreased. What will the decrease in demand do to the...
-
Suppose Warner Music and Universal Music are in a duopoly and currently limit themselves to 10 new artists per year. One artist sells 2 million songs at $1.25 per song. However, each label is capable...
-
Consider the market for corn. Say whether each of the following events will cause a shift in the demand curve or a movement along the curve. If it will cause a shift, specify the direction. a. A...
-
Consider an open economy characterized by the following equations: The parameters \(m_{1}\) and \(x_{1}\) are the propensities to import and export. Assume that the real exchange rate is fixed at a...
-
Consider an open economy in which the real exchange rate is fixed and equal to one. Consumption, investment, government spending, and taxes are given by where \(Y^{*}\) denotes foreign output. a....
-
Label each of the following statements true, false, or uncertain. Explain briefly. a. The interest rate parity condition means that interest rates are equal across countries. b. Other things being...
Study smarter with the SolutionInn App