Microeconomics
13th Edition
ISBN: 9781337617451
Author: Roger A. Arnold
Publisher: Cengage Learning, Inc.
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Chapter 10, Problem 4QP
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The market for paperback detective novels is perfectly competitive. Market Demand is given by Q=450-6P. Market Supply is given by Q=4P-13.
Suppose 21 units are bought to the market. Consider the Marginal Cost of production for these 21 units. What is the maximum Marginal Cost of production of these 21 units? Enter a number only, do not include the $ sign.
Hint: 21 doesn't have to be the market quantity.
Demand for microprocessors is given by P = 35 – 5Q , where Q is the quantity of microchips (in millions).
The typical firm’s total cost of producing a chip is Ci = 5qi, where qi is the output of firm i.
a) Under perfect competition, what are the equilibrium price and quantity?
In a market there is a single firm whose total cost curve is CT = 40q. The market demand is Q = 1000 - P. What is the equilibrium price and quantity at this market? What is the profit of the firm in the short term? Which is the deadweight loss associated with lack of competition?
Chapter 10 Solutions
Microeconomics
Ch. 10.1 - Prob. 1STCh. 10.1 - Prob. 2STCh. 10.1 - Prob. 3STCh. 10.3 - Prob. 1STCh. 10.3 - Prob. 2STCh. 10.3 - Prob. 3STCh. 10.3 - Prob. 4STCh. 10.5 - Prob. 1STCh. 10.5 - Prob. 2STCh. 10.5 - Prob. 3ST
Ch. 10 - Prob. 1QPCh. 10 - Prob. 2QPCh. 10 - Prob. 3QPCh. 10 - Is there a deadweight loss if a firm produces the...Ch. 10 - Prob. 5QPCh. 10 - Prob. 6QPCh. 10 - Prob. 7QPCh. 10 - Prob. 8QPCh. 10 - Prob. 9QPCh. 10 - Prob. 10QPCh. 10 - Prob. 11QPCh. 10 - Prob. 12QPCh. 10 - Prob. 13QPCh. 10 - Prob. 14QPCh. 10 - Prob. 1WNGCh. 10 - Prob. 2WNGCh. 10 - Prob. 3WNGCh. 10 - Prob. 4WNGCh. 10 - Prob. 5WNGCh. 10 - Prob. 6WNG
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- Suppose the quantity of apples supplied in yourmarket is 2,400. If there are 60 apple producers,each with identical cost structures, how manyapples does each producer supply to the market?arrow_forwardWhat is the effect on the short-run equilibrium of a specific subsidy of s per unit that is given to all n firms in a market?arrow_forwardConsider the competitive market for ruthenium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. 80 72 56 · ཉི་ ཀ་ཇཱ་སྐ་ན་ COSTS (Dollars per pound) AVC 16 MC- 8 ATC B 12 16 20 24 28 QUANTITY (Thousands of pounds) 36 The following graph plots the market demand curve for ruthenium. ? Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 10 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 20 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 30 firms. PRICE (Dollars per pound) 80 72…arrow_forward
- Will a profit-maximizing firm in a competitive market ever produce a positive level of output in the range where the marginal cost is falling? Give an explanation.arrow_forwardIn competitive markets economic profit becomes zero in the long-run. However, it is also possible for some firms to earn a greater accounting profit and to enjoy a higher producer surplus than other firms. How is it possible?arrow_forwardDetermine the output level that will create zero economic profit.arrow_forward
- Glowglobes are produced by identical firms in a perfectly competitive market. Each firm's Total Cost function is TC=599+17q+q^2 and Marginal Cost function is MC=17+2q. Market demand is Q=517-P. If the market price is $95, what is the quantity each firm produces?arrow_forwardA market is at long-run equilibrium of P* = S194 and Q* = 76800 units. All firms in the market are identical, and each has a marginal cost curve of P = 2 + 2g, where g is the quantity produced by that firm only. How many firms exist in the market? Answer:arrow_forwardConsider a perfectly newspaper market with identical firms, each with the usual shaped cost curves. (1) The government imposes a (permanent) $2 per-newspaper subsidy on the market. What is the impact of the subsidy on the newspaper market? Make sure to distinguish between the short-run and the long-run impacts. (2) If demand permanently decreases, what is the impact on the newspaper market? Make sure to distinguish between the short-run and the long-run impacts.arrow_forward
- Consider the competitive market for ruthenium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. COSTS (Dollars per pound), go 72 64 56 48 40 32 24 ATC 16 AVC MC- ☐ 0 4 8 12 16 20 24 28 32 36 40 QUANTITY (Thousands of pounds) The following graph plots the market demand curve for ruthenium.arrow_forwardHomework 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…arrow_forwardSuppose that each firm in a competitive industry has the following costs: Totalcost:TC=50+1/2q2 Marginalcost:MC=q where q is an individual firm's quantity produced. The market demand curve for this product is Demand:QD=120−P where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market.a. What is each firm's fixed cost? What is its variable cost? Give the equation for average total cost.b. Graph average-total-cost curve and the marginal-cost curve for qfrom 5 to 15. Atwhat quantity is average-total-cost curve at its minimum? What is marginal cost and averagetotal cost at that quantity?c. Give the equation for each firm's supply curve.d. Give the equation for the market supply curve for the short run in which the number of firms is fixed.e. What is the equilibrium price and quantity for this market in the short run?f. In this equilibrium, how much does each firm produce? Calculate each firm's profit or loss. Is there incentive for firms to…arrow_forward
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