Microeconomics
13th Edition
ISBN: 9781337617406
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 8, Problem 8QP
To determine
Why the average fixed cost (AFC) continuously declines.
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After viewing the film Back to the Future, Matt takes a nap but has a disturbing dream. He sees himself 50 years into the future, and his town has become a large city. Dozens of computer businesses exist in the city. However, he is still selling only 1200 computers a year at his store. He observes that computer prices are now $900 and his ATC is still $1000. His AVC is $750 and his AFC is $250. In a panic, Matt closes his store immediately rather than continue to lose money.
Did he do the right thing? Why, or why not? Illustrate numerically to support your answer.
In desperation, Matt considers raising his price back to the $1,300 that he charged in the “good old days.” Without any more information than the fact that computers now sell in a perfectly competitive market, can you tell Matt what the outcome of his price change will be?
Perplexed about whether his proposed action is the right approach and uncertain about your advice, Matt calls in a consultant who tells him that he…
The supply and demand for a computer in a store are given for two prices: for a price of $800, the demand quanity is 50 and the supply quanity 230: for a price of $50, the demand quanity is 150 and the supply quantity 150.
Let a represent the quanity
A. Write an equation representing the demand function
B. Write an equation representing the supply function
C. Find the equlibrium quantity and price
Analyze the demand function for Toyotas in problem C4, page 82. Please also read “What is a Symbol” located in the folder with this assignment.
This function is:
QT = 200 -.01PT +.005PM -10PG +.01I +.003A
Where:
QT = quantity purchased
PT = average price of Toyotas
PM = average price of Mazdas
PG = price of gasoline
I = per capita income
A = dollars spent annually on advertising
Characterize this function by circling all in the following list that are applicable:
univariate, bivariate, multivariate, linear, exponential, logarithmic, curvilinear, 1st degree, 3rd degree, additive, multiplicative, linearly homogeneous
What is the numerical value of the partial derivative of the function with respect to the price of gasoline (PG) (be sure to also include the + or – sign. Note: I do not want the symbol for this partial derivative)?
Write the mathematical symbol representing the coefficient of income (I) (the numerical…
Chapter 8 Solutions
Microeconomics
Ch. 8.2 - Prob. 1STCh. 8.2 - Prob. 2STCh. 8.2 - Prob. 3STCh. 8.2 - Prob. 4STCh. 8.3 - Prob. 1STCh. 8.3 - Prob. 2STCh. 8.3 - Prob. 3STCh. 8.4 - Prob. 1STCh. 8.4 - Prob. 2STCh. 8.4 - Prob. 3ST
Ch. 8.4 - Prob. 4STCh. 8.5 - Prob. 1STCh. 8.5 - Prob. 2STCh. 8.5 - Prob. 3STCh. 8 - Prob. 1QPCh. 8 - Prob. 2QPCh. 8 - Prob. 3QPCh. 8 - Prob. 4QPCh. 8 - Prob. 5QPCh. 8 - Prob. 6QPCh. 8 - Prob. 7QPCh. 8 - Prob. 8QPCh. 8 - Prob. 9QPCh. 8 - Prob. 10QPCh. 8 - Prob. 11QPCh. 8 - Prob. 12QPCh. 8 - Prob. 13QPCh. 8 - Prob. 14QPCh. 8 - Prob. 15QPCh. 8 - Prob. 16QPCh. 8 - Prob. 17QPCh. 8 - Prob. 18QPCh. 8 - Prob. 19QPCh. 8 - Prob. 1WNGCh. 8 - Prob. 2WNGCh. 8 - Prob. 3WNGCh. 8 - Prob. 4WNGCh. 8 - Prob. 5WNGCh. 8 - Prob. 6WNGCh. 8 - Prob. 7WNGCh. 8 - Prob. 8WNGCh. 8 - Prob. 9WNG
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