Given the information on the preceding graph, use the blue line (circle symbol) to graph the demand curve for the dominant firm (also known as the residual demand curve) and the black line (plus symbol) to graph the marginal revenue curve for the dominant firm on the following graph. (Hint: The slope of the marginal revenue curve is twice that of the demand curve since the demand curve is linear in this case.) Price (Dollars per box of cereal) 22 20 22 10 0 D MC of Dominant Firm 20 40 60 80 10 120 140 160 180 200 220 240 QUANTITY (Millions of boxes of cereal per year) -0 DF Demand Marginal Revenue This graph also shows the dominant firm's marginal cost curve. Given that cost curve, as well as the demand and marginal revenue curves you derived, the price of a box of cereal will be s under the price leadership model.

Given the information on the preceding graph, use the blue line (circle symbol) to graph the demand curve for the dominant firm (also known as the residual demand curve) and the black line (plus symbol) to graph the marginal revenue curve for the dominant firm on the following graph. (Hint: The slope of the marginal revenue curve is twice that of the demand curve since the demand curve is linear in this case.) Price (Dollars per box of cereal) 22 20 22 10 0 D MC of Dominant Firm 20 40 60 80 10 120 140 160 180 200 220 240 QUANTITY (Millions of boxes of cereal per year) -0 DF Demand Marginal Revenue This graph also shows the dominant firm's marginal cost curve. Given that cost curve, as well as the demand and marginal revenue curves you derived, the price of a box of cereal will be s under the price leadership model.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

2. Calculating marginal revenue from a linear demand curve The blue curve on the following graph represents the demand curve facing a firm that can set its own prices. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per unit) 160 TOTAL REVENUE (Dol 140 120 2250 2000 1750 1500 1250 On the graph input tool, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 10, 20, 25, 30, 40, and 50 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green points (triangle symbol) to plot the results. 1000 750 500 250 0 5 10 15 20 25 30 35 40 45 50 QUANTITY (Units) 200 Demand 10 120 -40 15 30 35 QUANTITY (Number of units) 45 Graph Input Tool…
please answer the all questions
Figure 14-4 In the following figure, graph (a) depicts the linear marginal cost (MC) of a firm in a competitive market, and graph (b) depicts the linear market supply curve for a market with a fixed number of identical firms. Graph (a): Firm Graph (b): Market Refer to Figure 14 -4. If at a market price of $1.75,52,500 units of output are supplied to this market, how many identical firms are participating in this market? 250 75 100 300 Please give me correct answer with Calculation and full explanation; otherwise, i give multiple downvote
7. A competitive firm participates in a market where market demand & supply are given by QD=85,000-5000P Qs = 40,000+ 2500 P Find the market equilibrium price. Plot a graph of the demand curve facing the firm. Given that the marginal cost curve of the firm is given by the following: MC = 2q, calculate the profit maximizing quantity that the firm will produce. Assume that FC=0. Calculate the profit of the firm at this quantity. a. b. C.
2.The marginal revenue of a firm is given by the following equation: MR(Q) = 22 +21Q + 16Q2 Where, Q represents the quantity produced. Also given, the total revenue of the firm, when they produce 5 units of output, is 50, i.e., TR(5) = 50. Calculate the firm's total revenue function. What is the value of the constant term in the total revenue function? Answer in two decimal places. Be careful about the sign. Calculate the total revenue of the firm when the firm produces 7 units of output. Answer in two decimal places.
6. Deriving the short-run supply curve The following graph plots the marginal cost (MC) curve, average total cost (ATC) curve, and average variable cost (AVC) curve for a firm operating in the competitive market for sun lamps. COSTS (Dollars) 100 20 80 TO 0 □ 5 D MC-D Price (Dollars per lamp) 10 20 32 40 50 60 ATC AVC Quantity (Lamps) DO 15 QUANTITY (Thousands of lamps) 50 For every price level given in the following table, use the graph to determine the profit-maximizing quantity of lamps for the firm. Further, select whether the firm will choose to produce, shut down, or be indifferent between the two in the short run. (Assume that when price exactly equals average variable cost, the firm is indifferent between producing zero lamps and the profit-maximizing quantity of lamps.) Lastly, determine whether the firm will earn a profit, incur a loss, or break even at each price. ? Produce or Shut Down? Profit or Loss?
Sketch a graph of the theater's demand functions, marginal revenue, and marginal cost to find the following: 1. The firm's profit-maximizing price = $____? 2. Ticket output = ____? 3. Economic profit = $ ____? 4. Compute consumer surplus, producer surplus, and deadweight loss
Please diagram the revenue and profit situation (which would also include the cost curves) for a producer of a highly elastic (but not perfectly elastic) good of your choice (a restaurant, boutique clothing store, etc.). Under what circumstances would it make sense for them to raise their price? While profit maximization is the main goal for most firms (and one which you should be able to represent on a diagram), you may wish to consider alternative goals depending upon the business you have chosen. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
2.- A company that works in a perfectly competitive market has a total cost function: TC = Q3 - 52.5Q2 + 1,050Q + 6,750 The supply and demand functions in that market are: QS = 2P -704 Qd = 5,260 - 5P d) Calculate the market consumer surplus. e) Validate the utilities by calculating them as the area of the rectangle on the graph.
3. Consider a market for an identical product with four firms. The inverse demand for this product is P = 150-2Q where P is price and Q is aggregate output. The production costs for firms 1 and 2 is given by C(qi) = 5qi where qi is the output of firm i and the production costs for firms 3 and 4 is given by C(q) = 10qį. That is, firms 1 and 2 have a constant marginal cost of 5 per unit and firms 3 and 4 have a constant marginal cost of 10 per unit. Assume that the firms each choose their outputs to maximize profits (Cournot competition) a. Find the Cournot equilibrium output for each firm, the market price and the profits of each of the four firms. (10 pts) b. Suppose that firms 1 and 2 merge and the merged firm's variable cost is the lower of the two firms' costs. Assume that all other firms continue to act as Cournot competitors after the merger. Calculate the Cournot equilibrium output for each firm, the market price and the profits of each of the three firms. Is this merger…
On the graph input tool, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 6, 12, 15, 18, 24, and 30 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green points (triangle symbol) to plot the results. Calculate the total revenue if the firm produces 6 versus 5 units. Then, calculate the marginal revenue of the sixth unit produced. The marginal revenue of the sixth unit produced is________. Calculate the total revenue if the firm produces 12 versus 11 units. Then, calculate the marginal revenue of the 12th unit produced. The marginal revenue of the 12th unit produced is_________.
A firm with market power can divide its sales into two submarkets, the demands and marginal revenues of which are shown in the following diagram. $ Price, marginal revenue, and marginal cost (dollars) 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0 5 10 MRA 15 MRB 20 Quantity 25 DA 30 35 MC = ATC DB 40 (a) How many quantities of output should the firm produce? 1 45 Q (b) How many quantities should be sold to market A? How many quantities should be sold to market B? What price should be charged in each market? (c) Calculate the price elasticities at the prices charged in each submarket. Do these price elasticities have the expected relative magnitudes? Explain. (d) What is the amount of profit generated by the firm?