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(2) (a) What is product differentiation? In what market structure is this an essential feature? Briefly explain, at least, three different ways firms in this industry differentiate their products from those of other firms.
(b)Suppose a firm in this industry faces the following demand and total cost functions:
P = 5900 – 10Q
3 2
TC = 2Q - 4Q +140Q + 845.
Determine the profit maximizing output the firm should produce, the market clearing price and the total profit (if any) to be earned.
Suppose short run production function of a firm is given by Q = 600L2 - L where Q is the level of output and L is the number of labours employed.
a. Compute optimum labour use for a profit maximizing firm.
b. Over what range of labour does this firm experience increasing marginal product?
C. Over what range of labour does this firm experience diminishing marginal product?
d. Over what range of labour does this firm experience a negative marginal product?
A consumer has 150ph to spend on 2 goods. Discuss/Explain how he is going to attain his consumer equilibrium with the interplay of his budget and his level of satisfaction
How is the pandemic,covid-19 greatly affects our country in terms of the following
a.)prices of goods & service
b.)selling modalities
c.) consumer behavior
A producer, in order to maximize his level of production must consider 2 major factors. Given a 2 resources: labor and capital, what must he take into account to attain a certain level of production. How is producer's equilibrium obtained? Explain.
A consumer has 150ph to spend on 2 goods. Discuss/Explain how he is going to attain his consumer equilibrium with the interplay of his budget and his level of satisfaction
Explain any five characteristics of an oligopoly
Identify and explain any five characteristics of a monopoly
A manufacturer of electronics products is considering entering the telephone equipment business> It estimates that if it were to begin making wireless telephones, its short-run cost function would be as follows:
Q (thousands)
AVC ($)
AC ($)
MC ($)
13
37.90
45.59
31.90
14
37.60
44.74
33.70
15
37.50
44.17
36.10
16
37.60
43.85
39.10
17
37.90
43.78
42.70
18
38.40
43.96
46.90
19
39.10
44.36
51.70
20
40.00
45.00
57.10
1. Plot the average cost, average variable cost and marginal cost on a graph.
2. Suppose that the wholesale price of a wireless phone is currently $50, what is the profit maximizing output level?
3. How much is the total profit of this company?
4. Suppose that the firm does enter the market and that overtime increasing competition causes prices of telephone to fall to $35, how much is the new production level?
5. How much is the profit (loss) when the price drops to $35?
6. Should the firm stay in business or shut down in the short run if the price is $35?
Suppose that a typical firm in a monopolistically competitive industry faces a demand curve given by:
q = 60 − (1/2)p, where q is quantity sold per week.
The firm’s marginal cost curve is given by: MC = 60.
- How much will the firm produce in the short run?
- What price will it charge?
In addition to providing the quantitative answers for the question, please also describe the approach you used to arrive at your conclusions.
