EBK INTERMEDIATE MICROECONOMICS AND ITS
EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Chapter 9.9, Problem 2MQ
To determine

To ascertain: Role of economic rent in pricing of the product.

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Suppose that over the short run (say the next 5 years), demand for OPEC oil is given by   P = 165 – 2.5q. Here q is measured in millions of barrels a day. OPEC marginal cost per barrel is $15.   What is OPEC’s optimal level of production? What is the prevailing price of oil at that level? Many experts contend that maximizing short-run profit is counterproductive for OPEC in the long run because high price reduces buyers to conserve energy and spur competition and new exploration that increases the overall supply of oil. Suppose that the demand curve just described will remain unchanged only if oil prices stabilize at $65 per barrel or below. If oil price exceeds this threshold, long run demand (over a second five year-period) will be curtailed to P = 135 – 2.5q. OPEC seeks to maximize its total profit over the next decade. What is the optimum output and price policy? (assume all values are present values)
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?
Mango Systems believes that demand for its pet e-mouse follows a linear demand equation: Quantity = 43,911 - 708* Price Mango's variable cost to produce one pet e-mouse is $23.50. Find the maximum total contribution margin (margin per unit times quantity sold) that Mango Systems can possibly achieve on its pet e-mouse. (Rounding: penny.) Your Answer:
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