Microeconomics Answers

A firm has the following demand function 𝑷 = 𝟐𝟎𝟎 − 𝟐𝑸 and the average cost of 𝑨𝑪 = 𝟏𝟎𝟎/𝑸 + 𝟑𝑸 − 𝟐𝟎.

a. Find the profit function.

b. Estimate the marginal cost function.

c. Obtain the production that maximizes the profit.

d. Evaluate the average cost and the marginal cost at the maximizing production level.

Consider a firm with the following production function 𝑸 = 𝟓𝟎𝟎𝟎𝑳 − 𝟐𝑳².

a. Find the maximum production level.

b. How many units of labor are needed at that point.

c. Obtain the function of marginal product of labor (𝑀𝑅𝐿).

d. Graph the production function and the 𝑀𝑅�

Opportunity cost

2. A limited edition package is sold only to 200 customers for $130 each. The average value of the package for the 200 customers is $280. What is the total consumer surplus?

 c. $30,000

With the aid of diagram(s) determine how equilibrium is achieved when there is non-government 

intervention in the market economy

In one year, 15 dance studios opened in Durban. During that same year, SABC started broadcasting professional dance shows on TV, which sparked more interest in the sport. What would we expect to happen to the price and quantity of attending a dance lesson in Durban during that year?

Which stage of short run production is efficient?why?

In a competitive market, supply and demand decrease simultaneously. The effect on equilibrium quantity is?

A manufacturer can produce radios at a cost of $10 apiece an estimated that if they are sold for x dollars, consumers will buy approximately80-x radios each month. Express the manufacturer’s monthly profit as a function of the price x, graph this function, and determine the price at which the manufacture’s profit will be greatest.

What is Diminishing Marginal utility (DMU)? Explain and illustrate this concept graphically using the curves of total and Marginal utility.