Question: The Upward Sloping Long Run Supply Curve for Cotton Mini Case shows a
The “Upward-Sloping Long-Run Supply Curve for Cotton” Mini-Case shows a supply curve for cotton. Discuss the equilibrium if the world demand curve crosses this supply curve in either (a) a flat section labeled Brazil or (b) the following vertical section. What do cotton farms in the United States do?
Answer to relevant QuestionsChinese art factories are flooding the world’s generic art market (Keith Bradsher, “Own Original Chinese Copies of Real Western Art!” New York Times, July 15, 2005). The value of bulk shipments of Chinese paintings to ...Using a graph similar to figure, show that increasing output beyond the competitive level decreases total surplus because the cost of producing this extra output exceeds the value consumers place on it. If the inverse demand function is p = 300 – 3Q, what is the marginal revenue function? Draw the demand and marginal revenue curves. At what quantities do the demand and marginal revenue lines hit the quantity axis? Does it affect a monopoly’s profit if it chooses price or quantity (assuming it chooses them optimally)? Why can’t a monopoly choose both price and quantity? A monopoly has an inverse demand function given by p = 120 – Q and a constant marginal cost of 10. Calculate the deadweight loss if the monopoly charges the profit-maximizing price.
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