Econ Ch8

Chapter 8 1.Question #1, page 189 in text By allowing learner to fleece and choose between sets, they bequeath pick price willing below their reservation price and university cannot get to their supererogatory. For example, sleepers will fork out a put one overr surplus of $2,500 when they subvert the manse room by $3,000. The eaters will have consumer surplus of $ 3,500 when they buy the repast propose by $2,500. The best price to consume the maximum consumer surplus and get the highest revenue is to charge a total of $8,000 for a both dorm room and meal plan. Chapter 9 2. task #5, p. 221 in text. Total cost = cc + 50 q Market direct: P = 290 (1/3) Q Number of homes in securities industry: n=14 The take level that maximizes cabbage: q = (a c) / [(n+1)*b] q = (290 50) / [ (14+1)*(1/3)] = 48 unit of measurement 48 units is the quantity level were the firm can maximize their profit. At this level of achievement the commercialise reach it is Nas h Equilibrium , hence there is no bonus for firm to increase their production or price. 3. Problem #6, p. 221 in text. (You do not need to derive the Cournot equilibrium. skilful make for for the values using the appropriate formulas.) Market solicit: P = 400 2Q Unit cost production = 40 a.

level(p)s quantity in equilibrium is : q1 = (a-c)/3b = (400-40)/(3*2)= 60 unit = q2 truehearteds revenue: P= 400 2 * (2*60) = $160 Firms profit = (60*160) (60*40) = $7200 ? b.Monopoly output: MR=400-4q MC=40 MR=MC 400 4q = 40 then q=90 unit The reason that producing on half the monopoly output (90*1.5 = 135) a Nash equilibrium outcom e is that it will exceed the market demand o! f Nash equilibrium ($160). 4. Problem #8, p. 221-222 in text. (HINT: First wait the scratch of a market with two firms, and then dwell this address for 3, 4, and 5 firms.) a.To obtain the long run equilibrium, offspring of firms in the industry should be infinity, and it is calculated by: qi= (a-c) / [(n+1)*b] b.For two firms: Quantity: q1=q2= (a-c)/[(n+1)*b]=...If you want to get a abundant essay, rear it on our website: BestEssayCheap.com

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