Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Chapter 13, Problem 16SQ
To determine
The impact of price equal to LRMC.
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There are 38 nearly identical ABC stores within a one-mile radius in Waikiki. The combined size of these 38 stores allows ABC to offer large quantities at favorable prices.
a. ABC gained market power through
a.economies of scale
b.government protection
c.control of an important input
.
b. ABC’s market power
a.does
b.does not
guarantee that the firm makes an economic profit.
There are 38 nearly identical ABC stores within a one-mile radius in Waikiki. The combined size of these 38 stores allows ABC to offer large quantities at favorable prices.
a. ABC gained market power through
economies of scale
government protection
control of an important input
.
b. ABC’s market power
does
does not
guarantee that the firm makes an economic profit.
Price
(dollars
ticket)
20
Quantity
Total cost
(dollars per
Big Top is the only circus in the nation. The table
sets out the demand schedule for circus tickets
and the cost schedule for producing the circus.
(tickets
per show)
show)
0
1,000
a.
18
100
1,600
Calculate Big Top's profit-maximizing price,
output, and economic profit if it charges a
single price for all tickets.
16
200
2,200
14
300
2,800
12
400
3,400
10
500
4,000
8
600
4,600
6
700
5,200
Big Top's total revenue and marginal revenue
schedules are in the second table (see above
table), which is useful to answer these
questions. Big Top's marginal cost is constant
and equal to $6 per ticket. Big Top's marginal
revenue equals its marginal cost when the
quantity of tickets is 350 tickets per show and the price is $13 per ticket. The total revenue is 350 tickets x
$13, which is $4,550. The total cost of 350 tickets is $3,100. So the economic profit equals $4,550 -
$3,100, which is $1, 450. You are constructing a table with total…
Chapter 13 Solutions
Micro Economics For Today
Ch. 13.2 - Prob. 1YTECh. 13.6 - Prob. 1.1YTECh. 13.6 - Prob. 1.2YTECh. 13 - Prob. 1SQPCh. 13 - Prob. 2SQPCh. 13 - Prob. 3SQPCh. 13 - Prob. 4SQPCh. 13 - Prob. 5SQPCh. 13 - Prob. 6SQPCh. 13 - Prob. 7SQP
Ch. 13 - Prob. 8SQPCh. 13 - Prob. 9SQPCh. 13 - Prob. 10SQPCh. 13 - Prob. 11SQPCh. 13 - Prob. 12SQPCh. 13 - Prob. 1SQCh. 13 - Prob. 2SQCh. 13 - Prob. 3SQCh. 13 - Prob. 4SQCh. 13 - Prob. 5SQCh. 13 - Prob. 6SQCh. 13 - Prob. 7SQCh. 13 - Prob. 8SQCh. 13 - Prob. 9SQCh. 13 - Prob. 10SQCh. 13 - Prob. 11SQCh. 13 - Prob. 12SQCh. 13 - Prob. 13SQCh. 13 - Prob. 14SQCh. 13 - Prob. 15SQCh. 13 - Prob. 16SQCh. 13 - Prob. 17SQCh. 13 - Prob. 18SQCh. 13 - Prob. 19SQCh. 13 - Prob. 20SQ
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