EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Question
Chapter 11, Problem 11.5P
To determine
The total output that the company chooses to produce and the way they distribute the production between two factories in order to maximize the profits is to be determined.
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Intel is the world’s largest manufacture of semiconductor chips by revenue. During the 1990s, Intel became the dominant supplier of microprocessors for PCs and was known for aggressive and anti-competitive tactics in defense of its market position. Consider the market for Intel’s Pentium II processor, released in May 1997. Assume Pentium II enjoyed a monopoly in computer processors. Intel’s cost of production is characterized by function C = 10Q2, marginal cost MC = 20Q, while the market demand for the product is P = 400 − 10Q.
Calculate Intel’s profit-maximizing quantity for its Pentium II processor. How much would Intel
price its Pentium IIs?
Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run competitive equilibrium with many hot dog stands in the
city, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power.
The following graph shows the demand (D) and supply (S = MC) curves in the market for hot dogs.
Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from competition.
Competitive Market
5.0
4.5
PC Outcome
4.0
3.5
3.0
o 2.5
2.0
S=MC
1.5
1.0
0.5
D
50
100
150
200
250
300
350
400
450
500
QUANTITY (Hot dogs)
PRICE (Dollars per hot dog)
The names of the compagny is H20
A compagny of water production and distribution company is in a monopoly situation.
it's total cost function is given by:
CT (q) = q² + 10q
where q represents the quantities produced in millions of m ^ 3 of water.
She is faced with the following request
p = 50-4q
with p the price in cents.
Please answer the following question
a) Calculate the price, quantity and monopoly profit of H20
b) Represent the demand curves of average cost, marginal cost and marginal revenue of H20
c) H20 learns from the news that a potential entrant wants to enter the market by selling 5 units at a unit cost of 20.
Determine the price level below which H20 can set a limit price
Then check whether the monopoly price calculated in question 1 can be considered a limited price
d) Would H20 remain profitable if the entrant were to enter the market anyway ? (for this you have to calculate the market price that will rise as a result of the entry of the competitor)
e) The entrant…
Chapter 11 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 11.2 - Prob. 1TTACh. 11.2 - Prob. 2TTACh. 11.2 - Prob. 1MQCh. 11.2 - Prob. 2MQCh. 11.2 - Prob. 1.1MQCh. 11.2 - Prob. 2.1MQCh. 11.3 - Prob. 1MQCh. 11.3 - Prob. 1TTACh. 11.3 - Prob. 2TTACh. 11.4 - Prob. 1TTA
Ch. 11.4 - Prob. 2TTACh. 11.4 - Prob. 1MQCh. 11.4 - Prob. 2MQCh. 11.4 - Prob. 1.1TTACh. 11.4 - Prob. 2.1TTACh. 11.4 - Prob. 1.2TTACh. 11.4 - Prob. 2.2TTACh. 11.5 - Prob. 1MQCh. 11.5 - Prob. 1TTACh. 11.5 - Prob. 2TTACh. 11 - Prob. 1RQCh. 11 - Prob. 2RQCh. 11 - Prob. 3RQCh. 11 - Prob. 4RQCh. 11 - Prob. 5RQCh. 11 - Prob. 6RQCh. 11 - Prob. 7RQCh. 11 - Prob. 8RQCh. 11 - Prob. 9RQCh. 11 - Prob. 10RQCh. 11 - Prob. 11.1PCh. 11 - Prob. 11.2PCh. 11 - Prob. 11.3PCh. 11 - Prob. 11.4PCh. 11 - Prob. 11.5PCh. 11 - Prob. 11.6PCh. 11 - Prob. 11.7PCh. 11 - Prob. 11.8PCh. 11 - Prob. 11.9PCh. 11 - Prob. 11.10P
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