If a single firm with demand Q = 100-2P (Q= quantity, P = Price), reduces its constant marginal costs from £8 to £4 then Consumer Surplus (CS) and Producer Surplus (PS) after the reduction in marginal costs will be... Question 12 Answer a. CS=1058 PS = 529 b. CS = 2116 PS 1058 c. CS = 529 PS = 1058 d. CS = 1000 PS = 500 e. CS = 500 PS = 1000

If a single firm with demand Q = 100-2P (Q= quantity, P = Price), reduces its constant marginal costs from £8 to £4 then Consumer Surplus (CS) and Producer Surplus (PS) after the reduction in marginal costs will be... Question 12 Answer a. CS=1058 PS = 529 b. CS = 2116 PS 1058 c. CS = 529 PS = 1058 d. CS = 1000 PS = 500 e. CS = 500 PS = 1000

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter25: Monopoly

Section: Chapter Questions

Problem 9E

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Market Representative Firm S1 MC A my a MR = P $3.50 - - АТС $2.50 b. AVC D1 50,000 350 400 Quantity (Q) Output (Q) The diagram above depicts overall market supply and demand on the left, and the cost curves for a representative firm supplying in that market on the right. At the price $3.50, the firm: should shutdown. O is earning a negative economic profit (loss). is making neither a profit nor a loss. It is breaking even. O is earning a positive economic profit.
Figure 2 Revenue, Costs 40 38, 30 26 60 100 130 MC ATC AVC Q MR=50