Tutorial 7

CENGAGE MINDTAP Assignment 8 (Ch 14) 1 + 0 0 1 2 3 4 5 6 7 8 9 10 QUANTITY (Millions of small boxes) Suppose that Talero is one of more than a hundred competitive firms in Houston that produce such cardboard boxes. $5 Based on the preceding graph showing the daily market demand and supply curves, the price Talero must take as given is Fill in the price and the total, marginal, and average revenue Talero earns when it produces 0, 1, 2, or 3 boxes each day. Average Revenue (Dollars per box) Total Revenue Quantity (Вохes) Price Marginal Revenue (Dollars per box) (Dollars) (Dollars) 1 1 2 The demand curve that Talero faces is identical to which of its other curves? Check all that apply. Marginal revenue curve Marginal cost curve Supply curve AAA

F. Highgarden was the seat of House Tyrell and is the regional capital of the Reach, which is the most fertile part of Westeros, supplying the rest of the realm (especially King's Landing) with grain, fruit, wine, and livestock. Such large-scale agriculture industry has led to a competitive fertilizer market. Suppose the market for fertilizer in the Reach is perfectly competitive. Firms in the market are producing at their profit-maximizing output but are currently incurring economic losses. 1. How does the price of fertilizer compare to the average total cost and the marginal cost of producing fertilizer? 2. Draw two graphs, side by side, illustrating the present situation for the typical firm and for the market as a whole. 3. Assuming there is no change in either demand or the firms' cost curves, how will the market adjust in the long run? Explain what will happen in the long run to the price of fertilizer, marginal cost, average total cost, the quantity supplied by each firm, and…

Consider the competitive market for titanium. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. 80 72 64 56 ATC 48 40 24 16 AVC 8 MC D 3 6 12 15 18 21 24 27 30 QUANTITY (Thousands of pounds) The following diagram shows the market demand for titanium. (punod jed sjejjog) sISo2

Homework Consider the competitive market for steel. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. COSTS (Dollars per ton) PRICE (Dollars per ton) 100 90 70 80 50 40 30 100 20 90 0 80 70 60 50 40 30 20 The following graph shows the market demand for steel. 0 Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (Hint: You can disregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 40 firms. D MC D ATC AVC D O 5 10 15 20 25 35 QUANTITY…

The following graph shows the demand curve for a good and the long run average cost curve for a typical firm in this market.   If the government does not intervene in the market, then   Question 4 options:   there will be many firms in this market, all of whom will take the market price as given and produce where price equals marginal cost   there will only be 1 firm in this market, and they will produce where marginal revenue equals marginal cost   there will only be 1 firm in this market, and they will take the price as given and produce where price equals marginal cost   no firms will enter this market

Economics Question

consider a market with a large number of firms, an upward sloping supply curve S0, and a downward sloping demand curve D0.  We will start with the assumption that the market is perfectly competitive; hence, the supply curve S0 is the sum of the marginal cost curves of all the firms. Assume the market is perfectly competitive. Indicate the original competitive equilibrium price P0, equilibrium quantity Q0, the resulting Consumer Surplus CS0, the resulting Producer Surplus PS0, and the “socially optimal” output (the output the Benevolent Dictator would choose) QSO on your graph. Graphically indicate the size of Dead-Weight Loss DWL0 if there is such a loss.   Question - Now suppose that scientists discover that this particular product has a significant Positive Externality.  The Demand curve is a depiction of marginal private benefit (MPB). However, the existence of the positive externality means that for every given output level, Marginal Social Benefit (MSB) is higher than Marginal…

The tables (below) show the willingness to pay by three (competitive) consumers for additional units of some good, and the marginal costs of three (competitive) firms that produce that good. a) Compute the competitive equilibrium quantity and price for this market. Also, compute each consumer's surplus and each firm's profits. b) Now suppose that you have access to the same technology (and competitive input markets) as that of Firm 3. Entering the market (that is, launching a fourth firm) means a fixed (yes, sunk too) cost of $10. Would you decide to enter? (Entry has effects on the market, of course.) c) With the same data, suppose that all three firms merge. That is, now a single corporation controls (and decides on output for) all three firms (now, plants of one single firm). Obtain the output (or, equivalently, the price) that this monopolistic corporation will choose, and evaluate the consequences for the consumers (that is, the effect on the consumer surplus) and for the profits…

2. The demand curve facing a competitive firm The following graph illustrates the market for large moving trucks in Eugene, OR, during Oregon's fall move-in week. PRICE (Dollars per large truck) 400 360 320 Demand 280 240 200 8 160 120 80 40 0 1 3 4 5 6 7 8 QUANTITY (Hundreds of large trucks) 2 Supply + 9 10 (2)

Suppose that YouYeet is one of over a dozen competitive firms in the Oviedo area that offers moving truck rentals.   Based on the preceding graph showing the weekly market demand and supply curves, the price YouYeet must take as given is   .   Fill in the price and the total, marginal, and average revenue YouYeet earns when it rents 0, 1, 2, or 3 trucks during move-in week. Quantity Price Total Revenue Marginal Revenue Average Revenue (Trucks) (Dollars per truck) (Dollars) (Dollars) (Dollars per truck) 0   0   –   1         2         3           The demand curve faced by YouYeet is identical to which of its other curves? Check all that apply.   Supply curve   Marginal revenue curve   Average revenue curve   Marginal cost curve

Suppose that a local government is considering placing a tax on the rental of rooms on Airbnb. Before the tax, the total revenue earned by hosts using Airbnb was $10,000,000 per year. a) If the government imposes a 10% tax on these rooms, will they earn more or less than $1,000,000 in tax revenue if the market is assumed to be perfectly competitive? b) Will local residents who rent their homes (as tenants) benefit from this policy? (Use a diagram to explain) c) Does your answer to a) or b) change if there are a fixed (and small) number of rooms available to rent in the area?

Now, let’s assume “Allergy Gone” enters a competitive market (after the expiry of patent period) where there are numerous other firms also selling similar allergy medication. Using the graph above, find out the equilibrium price and quantity in the competitive market and explain in 1-2 sentences (Hint: In a competitive market, equilibrium is determined where D(AR) curve intersect with the supply curve). Calculate consumer surplus and producer surplus in this market.

The demand curve for guitars is given by Pd = 200 - 5Qd and supply for guitars is given by Ps = 20 + Qs. What is total surplus at equilibrium? 2,700 2,250 450 5,400 Suppose that a firm in a competitive industry has the following cost functions: Total Cost: TC = 100 + q² Marginal Cost: MC = 2q If the price of the good is $200, what is the firm's profit in the short-run equilibrium? 6400 1000 3200 9900

Use the following to answer questions (1) - (14): Suppose the local market for flat glass, considered a homogeneous product, consists of two firms, A and B. The market demand is given as: Q = 40 - 2P, where Q is the market quantity and P is the price. A's total cost (TC) is: TC, = 6°q4, where q, is the quantity produced and sold by A B's total cost (TC3) is: TC, = 8q2, where qg is the quantity produced and sold by B [1] The market structure these two firms operate in is definitely not monopolistic competition. A. True В. False [2] Behaving as Cournot competitors, at the Nash equilibrium A produces a quantity closest in value to: A. 9 В. 11 C. 13 D. 15 [3] Behaving as Cournot competitors, at the Nash equilibrium the market quantity is closest in value to: A. 10 В. 13 С. 17 D. 20 [4] Behaving as Cournot competitors, at the Nash equilibrium the market price is closest in value to: A. 9 В. 11 C. 15 D. 19 [5] Behaving as Cournot competitors, at the Nash equilibrium B's profit is closest in…

Consider the market for Atlantic salmon. Petuna, Tasmania’s smallest salmon farm, and Huon Aquaculture, a large corporate supplier, are both producers of Atlantic salmon. The marginal cost curves for both firms are shown in the graph below:        If the market price is $13 per kilo of salmon, how many kilos of salmon would Petuna supply? What about Huon Aquaculture? How many total kilos would they collectively supply? Is this allocation the most productively efficient way to produce this quantity of salmon? i will give thumbs up thanks

Consider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. (?) 80 72 04 55 ATC y 40 D 32 10 AVC 8 MC 0 0 6 18 21 24 30 QUANTITY (Thousands of pounds) The following diagram shows the market demand for copper. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (Hint: You can disregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 40 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 60 firms. (?) 80 72 Supply (20 firms) 64 Demand 58 33 Supply (40 firms) 40…

Exercise A.6 The market for a good is supplied by two companies whose total cost functions are given by C₁ (9₁) = 30q₁ and C₂ (92) = 30q2 respectively. The inverse market demand curve is given by: P(Q)=120-Q, where Q = Q₁ + Q₂. Calculate the price, quantity, and profits of each company in the following scenarios and indicate which would be more efficient: a) Companies compete on prices (Bertrand). b) Companies compete in quantities (Cournot). c) Companies form a cartel to maximize joint profits. Illustrate your reply with graphs.

Suppose five construction companies have the ability to build a factory overseas to produce a manufactured good The marginal cost of building a factory for each construction company is shown in the table below: Producer Company 1 Company 2 Company 3 Company 4 Company 5 Marginal Cost S1,000,000 $1.250,000 $1,300,000 $1,350.000 $1.500.000 If the market price of an overseas factory is $1.425,000, what is the surplus for these five companies? Producer surplus is S (Enter your response an a whole number

Question 2 Suppose that the cost function of a firm is C(q)=4q. Suppose that this is the only firm in the market, and demand is Q(p)=10-p. What is the Producer Surplus in a competitive equilibrium in this economy? 2 1 6 0 12

The graph illustrates the situation facing the publisher of the only newspaper containing local news in an isolated community. If the newspaper market were perfectly competitive, what would be the quantity, price, consumer surplus, and producer surplus? Draw a point at the equilibrium quantity and equilibrium price if this market is perfectly competitive. Draw and label the consumer surplus. Draw and label the producer surplus. 100- 80- 60- 40- 20- 0- Price and cost (cents per newspaper) 0 MC 100 D 200 300 400 Quantity (newspapers per day) >>> Draw only the objects specified in the question. 500 Q

Consider the following perfectly competitive market for oranges:   Qs = 5P   Qd = 60 – 5P   Now suppose that demand for oranges increases by 20 units at each price. After the increase in demand, which of the following is correct?   Group of answer choices   a The equilibrium price is unchanged, and the quantity traded increases by 20.   b The equilibrium price increases by $2, and the quantity traded increases by 20.   c The equilibrium price increases by $2, and the quantity traded increases by 10.   d The equilibrium price increases to $8, and the quantity traded decreases to 40.