Question: Redo Problem 7a to e with an initial inverse demand given by: P = 45 - Q In Problem 7 a. At what price should

Redo Problem 7a to e with an initial inverse demand given by:
P = 45 - Q
In Problem 7
a. At what price should this firm sell its product?
b. If this is a monopolistically competitive firm. What do you think would happen as the firm moves toward die long run? Explain.
c. Suppose in the long run, that inverse demand shifts to P = 25 - 0.2Q. What should the firm do? Explain. Provide graphs for both the short-run and long-run scenarios. Make sure your graphs include demand. MR. MC, and AC.
d. Suppose, in the long run, that inverse demand shifts to P = 45 - 0.8Q. What should the firm do Explain, and provide graphs for both the short-run and long-run scenarios. Make sure your graphs include demand, MR, MC. and AC.,
e. Does the demand in part c or part d represent a change in market share for the representative firm as a result of the entry or exit suggested in part b?

Step by Step Solution

★★★★★

3.30 Rating (153 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a P 25 and the firm is earning a shortrun economic loss b As fi... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

935-B-E-M-E (6574).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Redo Problem 14.2 with the following additional information. The asset is classified as a five-year MACRS property and has a book value of $5,760 if disposed of now. The firm's marginal tax rate is...

Redo Problem 14.3 with the following additional information. The asset is classified as a seven-year MACRS. The firm's marginal tax rate is 40%, and its after-tax MARR is 10%. In Problem 14.3...

Redo Problem 14.4 with the following additional information. The current book value of the old machine is $50,000. The old machine is being depreciated toward a zero salvage value by means of...

60 Let's consider the impact of government policy through the manipulation of the price. Maintain the basic model of demand and production as in Problem . But now introduce a government that has a...

These questions seems to be difficult to me because I cannot get the correct answers Nonlinear Pricing [based on 1VHS Problem 12.1]. A rm's total cost of producing Q units of output is C(Q) = 7'9 +...

econ 6. Consider Baumol and Klevorick's model of rate of return regulation, with the added complication that revenue is uncertain. In particular, in addition to the usual assumptions of the model,...

Please help with the following questions Auction Basics Consider an auction environment that matches the symmetric independent private value-3 spec- ication discussed in class. This means that all of...

SOLVE THE BELOW PROBLEMS 1. Two firms compete in a market to sell a homogenous product which inverse demand function a P = 600 - 3Q. Each firm produces at a constant marginal cost of $300 and has no...

Help me plz.... answer all.. show sure answer s Consider the standard Solow growth model. Let productiv'rty be denoted by A and let the production function be Y=AF{K,N]. For simplicity, assume that...

14-22. A rm in a perfectly competitive constant cost industry has total costs in the short run given by: TC=4q2+15q+576 q22 where q is output per day and TC is the total cost per day in dollars. The...

Find all positive integers M such that WNC encoding with M will produce code for each non-& source word. starter 1 is not such an integer

The fundamental and first overtone transitions of CO are centered at 2143.3 cm and 4260.0 cm respectively. Evaluate the equilibrium vibrational frequency, the anharmonicity constant, and force...

Consider the following two separate events for a company during the year: 1 . Loss on sale of investments = $ 2 0 . 2 . Unrealized gain on investment from increase in fair value = $ 3 0 . The company...

Consider the numerical example in section 9.3. (i) Suppose the debt/income ratio was to be stabilised at b555%. What is the level of the primary deficit/surplus to GDP that will achieve this? (ii)...

Define Q to be the level of output produced and sold, and assume that the firms cost function is given by the relationship TC = 20 + 5Q + Q2 Furthermore, assume that the demand for the output of the...

Use the cost and demand functions in Exercise 5 to calculate the following: a. Determine the marginal revenue and marginal cost functions. b. Show that, at the profit-maximizing output level...

Determine the partial derivatives with respect to all of the variables in the following functions: a. TC = 50 + 5Q1 + 10Q2 + .5Q1Q2 b. Q = 1.5L.60 K.50 c. QA = 2.5PA1.30 Y.20 PB.40

A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs = 8.5%, and the expected constant growth rate is g = 6.4%. What is the stock's current price?...

Steinberg Corporation and Dietrich Corporation are identical firms except that Dietrich is more levered. Both companies will remain in business for one more year. The companies' economists agree that...

in c++ please. Below I have posted the example Inputs for inputFile1.txt 1464815342.270047187805, 17.889999389648, 0.095994234085 1464815342.284098386765, 17.909999847412, 0.087267547846...