Product A is sold in a perfectly competitive, constant-cost industry. a. Draw a side-by-side graph for product A showing the market in long-run equilibrium with an individual firm earning normal profit. Label each of the following: i. The market's equilibrium price (PE) and quantity (QE) ii. The firm's profit-maximizing quantity (QE) b. How would it affect the quantity demanded if the government imposed a price floor below PE? c. The price of B, a complement for product A, decreases. Illustrate on your graph from part (a) the result of this in the short run. i. Label the new market price (P2) and new market quantity (Q2). ii. Shade completely any profit or loss for the firm. d. The price of B decreased by 10 percent, while the quantity demanded of A changed by 15 percent. What is the cross-price elasticity of A and B? e. What happens to the productive efficiency of the firm in the short run as a result of the change described in part (c)? f. What will happen to the price of A in the long run? Explain. g. In long-run equilibrium, the individual firm produces 50 units of A. At that level of output, its total cost is $200. What must be the market price? h. The whole market from part (g) clears at a quantity of 2,000 units in the long run. If the constant long-run supply would intersect the y-axis at $3 and the demand curve intersects the y-axis at $5, what is the consumer surplus?

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Yaster Breakfast Supplies is planning to manufacture and market a new toaster. After conducting extensive market surveys, the research department provides the following estimates: • a weekly demand of 302 at a price of $14 per toaster • a weekly demand of 196 at a price of $17 per toaster The financial department estimates that weekly fixed costs will be $1,438 and variable costs (cost per unit) will be $5. Assume: • the relationship between price and demand is linear • the cost function in linear Use your models to predict the marginal profit when Yaster is producing and selling 265 toasters per week. Round to the nearest cent. $ per toaster

The table to the right contains price-demand and total cost data for the production of projectors, where p is the wholesale price (in dollars) of a projector for an annual demand of x projectors and C is the total cost (in dollars) of producing x projectors. Answer the following questions (A) - (D). 380 450 650 750 p(S) 563 378 C(S) 113,000 121,800 144,000 176,000 186 98 (A) Find a quadratic regression equation for the price-demand data, using x as the independent variable. y= (Type an expression using x as the variable. Use integers or decimals for any numbers in the expression. Round the coefficients to seven decimal places as needed. Round the constant term to three decimal places as needed.) (B) Find a linear regression equation for the cost data, using x as the independent variable. y = (Type an expression using x as the variable. Use integers or decimals for any numbers in the expression. Round to two decimal places as needed.) Use the linear regression equation found in the…