Microeconomics Answers

Q.2  If following are the demand and supply equations for a consumer good:   (20)

        Q^d = 300,000/P (Q^d = quantity demanded)

        Q^s = 30P (Q^s = quantity supplied)

        (P = Price)

           Find the market clearing price and the quantity at the equilibrium. Also sketch the demand and supply curves.

Revenue. Is the most important part of buisness discuss its relevance in differnet market situations

7. You are given the following long-run cost function:

TC = 160Q - 20Q2 + 1.2Q3

a. Calculate the long-run average cost and marginal cost. Plot these costs on a graph.

b. Describe the nature of this function’s scale economies. Over what range of output does economies of scale exist? Diseconomies of scale? Show this on the graph.

Refer to Appendix 7B for help in answering Problems 8 and 9.

Suppose a market of T-Shirts can be illustrated by following equations,

demand P = 15-0.5 Q

supply P= 10+0.5Q

Using these equation, determine the equilibrium price and quantity of this market.

Now, suppose that a tax of $4 is imposed on the supplier of this market. What will be the new quantity available in the market? What will be the price paid by consumer? What will be the price received by producer? Draw a diagram to illustrate the market.

You are given the following long-run cost function:

TC = 160Q - 20Q2 + 1.2Q3

a. Calculate the long-run average cost and marginal cost. Plot these costs on a graph.

b. Describe the nature of this function’s scale economies. Over what range of output does economies of scale exist? Diseconomies of scale? Show this on the graph. 

What is the contrbution of building additional bridge on the total building cost

There are 1000 identical individual consumers for a good with a demand function Qd=12-20p and 100 identical suppliers with the supply function Qs=20p, find the demand and supply schedule and also find the equilibrium graphically

If the price of Pak Suzuki company Alto car decreases from Rs 1,700,000 to Rs 1,200,000, keeping other factors constant, it would be termed as movement along the demand curve or shift in the demand curve? 

There are two toast bakers in City A: Anderson and Carlson. They make the same toast and nobody can tell the difference. Th e demand curve of the toast in City A is P =6-0.01 Q, Q is the demand in each day and Q = Q _A + Q _C . The firms’ cost functions are C A (Q _A )= 2 + Q _A and C _C (Q _C ) = 1 + 2Q _C

a. What is each firm’s equilibrium output and profit if they behave noncooperatively? Use the Cournot model. Draw the firms’ reaction curves and show the equilibrium

Suppose that an industry is characterized as follows:

C = q² each firm’s total cost function

P =12-q industry demand curve

a. If there is only one firm in the industry, find the monopoly price, quantity, and level of

profit.

b. Graphically illustrate the demand curve, marginal revenue curve, marginal cost curve, and average cost curve.

c. If the government decides to levy a tax of $2 per unit on this product, what will be the new level of production, price, and profit?