Consider an imperfectly competitive service provider, Muscat Automotive Repair Services (MARS), whose total cost of production is C = 30Q +0. 165Q2. Also, MARS faces two different market segments, A and B, whose demands can be linearly expressed as QA = 240 − PA and QB = 120 − 0.5PB . (Hint: the marginal cost is the slope of the total cost function). 4. If MARS decides to segment the market in accordance with the demands of groups A and B, find the profit-maximizing prices and quantities (PA, QA) and (PB, QB). 5. What is the value of the consumer surplus for each group A and B, under this segmentation strategy? 6. Draw the situation described in (4) and (5) above, clearly showing each group’s profitmaximizing price and quantity, and the areas that correspond to their consumer surpluses.

Consider the market demand and supply for widgets: QP = 200-2P; QS = 3P – 180 (1) (a) If the market is perfectly competitive, find the equilibrium price and quantity, and find the consumer and producer surplus. (b) If the market has only one producer, whose cost function is TC 60Q+Q², find the equilibrium quantity and price, and find the consumer and producer surplus. (c) Based on (b), now suppose that the government imposes a $4 tax on per unit consumption. Find the new equilibrium price and quantity, the consumer and producer surplus, and the government revenue if the tax is imposed on the monopoly.

2.2

Can you show how Qsc is = 2Pc? Which is the answer for this.

An industry has the following cost function: C(X, Y ) = 1500+20X +20Y . Market demands for the 2 goods are given by PX =80−X, and PY =140−2Y Suppose the government wished to use two part tariffs in these markets, and suppose further that two part tariffs are feasible. Imagine that there are 10 consumer in each market. Solve for a set of two part tariffs (one for each martket) that pay the firm zero profits in total, yet achieves efficiency.

a) Find the long run equilibrium price.  Find the minimum efficient scale of the typical firm. Find the typical firm’s average cost when it operates at minimum efficient scale. In the long run, what price will prevail in this market? In words, clearly justify your answer. Suppose demand is QD = 3,200 – 100P. (b) Explain why you expect the number of firms in this market to be fifty-five. In this market, what is the short run supply function of the typical firm? What is the short run market supply function? Suppose the local government introduced a $90 licensing fee that raised the fixed cost from $160 to $250. c) Would the introduction of the licensing fee affect the short run equilibrium price or quantity? Justify your answer? Clearly explain why you expect that in the long run fewer larger firms will operate in this market. After the introduction of the licensing fee, what is the new long run equilibrium price? How many firms will survive in this market?

Window cleaning is a perfectly competitive market in Boston. The daily market demand for window cleaning in Boston is Q(P) = 360 ‒ 4P, where Q represents the daily number of houses served and P is the price per house; and (2) the current market price per house served is 30. Each window-cleaning firm faces a daily total cost of TC(q) 72+ 1/2 q2, where q represents the number of houses served per day. What is the current daily profit for each window-cleaning firm?  A. -72 B. 0 C. 378 D. 400 E. 578

Suppose a typical (representative) corn farm has a short run production technology which results in the outcome of U-shaped Average Variable Cost (AVC), Average Total Cost (ATC), and Marginal Cost (MC). Further, suppose this firm sells its product in a market where the price of the good is determined by the interaction of market Demand and Supply. Because an individual firm is very small compared to the rest of the market, we treat the market price as the price given to the firm, and the individual firm cannot impact that price.  assume we are in the Short Run for this firm. In graphing, put $ on the vertical axis and lower-case q (firm output) on the horizontal axis.    Start with the AFC0, AVC0, ATC0, and MC0 curves . show shifts in any of the cost curves, reflecting the higher cost of land (keeping in mind that this higher cost is independent of how much or how little corn is actually produced) and labeling the changed cost curves with a subscript 1. On the graph with $ on the…

Continuing from the previous questions where you are a manager of a firm is the exclusive manufacturer of a unique pair of rainbow shorts with demand and cost functions that are Q=100−2P; C=40+2Q2.   Now assume that the firm incurs a one-time cost of $10 for a zoning violation.  What is the price that the manager should now charge to maximize profits? (Just give the number, no need to include "$")

Economics