EBK MICROECONOMICS
9th Edition
ISBN: 8220103630955
Author: Rubinfeld
Publisher: PEARSON
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Question
Chapter 8, Problem 12E
(a)
To determine
Identify the industry in long-run equilibrium.
(b)
To determine
Identify the amount that used to purchase the new technology.
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A number of stores offer film developing as a service to their customers. Suppose that each store offering this service
has a cost function (C)
and a marginal cost (MC) of
C(q) = 25+0.40q+0.0625q²
MC(q) = 0.40+0.125q.
If the going rate for developing a roll of film is $8.00, is the industry in long-run equilibrium? No
Find the price associated with long-run equilibrium.
The market will be in long-run equilibrium when the price is $ (Enter your response rounded to two decimal places.)
(a) Let the industry producing soybeans be in a long-run equilibrium. What is the equilibrium price of a bushel of soybeans? How many billions of bushels are produced? How many farmers are there in the industry? What is the shipping fee per bushel of soybeans?
(b) Suppose that the demand for soybeans drops due to decreased im- port by China and becomes
Q = 15.3 − p.
In a new long run equilibrium, what is the equilibrium price of a bushel of soybeans? How many billions of bushels are produced? How many farmers are there in the industry? What is the shipping fee per bushel?
(c) Calculate the change in the producers’ surplus between the situations described in (a) and (b).
(d) Show that the decrease in the producers’ surplus equals to the decrease in the total shipping fees as the industry contracts incrementally from the equilibrium output in (a) to the equilibrium output in (b).
Consider the following cost curve for a firm in a competitive industry where the market price equals $150.
C= =q° + 6q + 1,500.
What is the firm's marginal cost (MC)?
MC = 150. (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a superscript can be created with the ^ character.)
At what level of output does the firm maximize profits (minimize losses)?
Profit is maximized at 12 units of output. (Round your answer to two decimal places.)
What is the firm's profit maximizing price?
The profit-maximizing price is $ (Round your response to the nearest dollar.)
What is the firm's profit?
The firm earns a profit of $. (Round your response to the nearest penny.)
In the short-run, this firm should
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Chapter 8 Solutions
EBK MICROECONOMICS
Ch. 8 - Prob. 1RQCh. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Prob. 4RQCh. 8 - Prob. 5RQCh. 8 - Prob. 6RQCh. 8 - Prob. 7RQCh. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQ
Ch. 8 - Prob. 11RQCh. 8 - Prob. 12RQCh. 8 - Prob. 13RQCh. 8 - Prob. 14RQCh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Suppose you are the manager of a watchmaking firm...Ch. 8 - Prob. 5ECh. 8 - Prob. 6ECh. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - A sales tax of 1 per unit of output is placed on a...Ch. 8 - Prob. 15E
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- Consider the following cost curve for a firm in a competitive industry where the market price equals $150. C = + 6g + 1,500. What is the firm's marginal cost (MC)? MC =- (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a superscript can be created with the ^ character.) At what level of output does the firm maximize profits (minimize losses)? Profit is maximized at units of output. (Round your answer to two decimal places.) What is the firm's profit maximizing price? The profit-maximizing price is $- (Round your response the nearest dollar.) What is the firm's profit? The firm earns a profit of $. (Round your response to the nearest penny.) In the short-run, this firm should shut down produce E 20 étv MacBook Air 80 DII DD F2 F3 F4 F8 ! @ # 2$ & 2 3 4 5 7 8 9 Q W E R Y P A S D F G H K C V B M ption command comman Narrow_forwardThe following graph plots the market demand curve for rhenium. 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 64 56 48 40 32 24 16 8 0 Demand 0 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Thousands of pounds) Because you know that competitive firms earn Supply (10 firms) Supply (20 firms) True 4 If there were 30 firms in this market, the short-run equilibrium price of rhenium would be s would Therefore, in the long run, firms would O False Supply (30 firms) per pound. From the graph, you can…arrow_forwardThe market for quinoa is perfectly competitive and consists of firms that all have the same cost function, C(q) = 200 + g²/2. What is each firm's supply function? Oq = Oq = p Oq = p+ 25 Oq = p - 25 Suppose the market is in a long-run equilibrium. What is the price of quinoa? Op = 5 Op = 10 Op = 15 Op = 20 Op = 25 The market-level demand curve is Qp = 2000 - 50p. What is the equilibrium market-level quantity? Og = 250 Oq = 500 Oq = 750arrow_forward
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