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given TC=70+30Q+2Q2. P=40 find the optimalquantity produced and sold by the firms so that they are maximizing profits
Market demand is given as Qd = 300 – 2P. Market supply is given as Qs = 2P + 100. In a perfectly competitive equilibrium, what will be price and quantity?
(4) Consider a market with the following demand and supply curves:
Q (p) = 20 – 2P
Q (p) = - 10 + 3P
(b)Suppose the government imposed a sales tax of $0.80 per unit of output sold, find the price paid by the consumer, the price received by the supplier, the equilibrium quantity transacted, and the total tax revenue received by the government.
(c)What do you think is the purpose for such tax policy? In your explanation, include a brief discussion of the importance of price elasticity of demand in the choice of commodities to be taxed in order to achieve specific policy goal(s).
(3)(a) Suppose that the market for a particular type of product purchased is perfectly competitive, what questions would you ask to determine the validity of the claim?
(b) Explain, with appropriate graphical illustration(s), why firms in a perfectly competitive market would earn zero economic profits in the long run.
(4) Consider a market with the following demand and supply curves:
Q (p) = 20 – 2P
Q (p) = - 10 + 3P
(a)Find the equilibrium price and the equilibrium quantity transacted in this market.
The Nottinghamshire Research Observatory in England calculated that students who attend Nottingham Technical University spend about £2,760 each in the local economy for a total of £50 million. In total, the impact of their spending on the local economy is £ million. Calculate the size of the student spending multiplier.
1. Draw indifferences curves to represent each of the following type of preferences.
(i) A customer is always pleased to change 5 sweet candy for 1 chochlate bar.
(ii) A customer always desires 2 glasses to wear with 1 frame.
(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.
1. Draw indifferences curves to represent each of the following type of preferences.
(i) A customer is always pleased to change 5 sweet candy for 1 chochlate bar.
(ii) A customer always desires 2 glasses to wear with 1 frame.
If a small percentage decrease in the price of chocolate causes a larger percentage decrease in the quantity supplied, what happens
Jason has the following utility function: U = F2C where F is food and C is clothing. Clothing is measured on the vertical axis while food is measured on the horizontal one.
Derive Jason's Marginal Rate of Substitution.
Does his Marginal Rate of Substitution stay constant along one of his indifference curves? Explain your answer clearly.
