Microeconomics Answers

The Federal board of revenue imposed a tax lemon soda which needs to be paid by the sellers, what will be the effect in lemon soda market.

4. A firm operates in a perfectly competitive market. The market price of its product is 4 birr and the total cost function is given by 𝑇𝐶=13𝑄3−5𝑄2+20𝑄+50, where TC is the total cost and Q is the level of output.

a) What level of output should the firm produce to maximize its profit?

b) Determine the level of profit at equilibrium.

c) What minimum price is required by the firm to stay in the market?

A bus company operates two routes. On route 1, research suggests that the price elasticity is -0.8 and on the other route -1.3. The company has decided to revise fares upwards on both routes by 10% this year. Comment on the decision. What alternative pricing strategy would you suggest? 

Private profit maximising firms, operating within competitive markets, form the backbone of the dynamic capitalism which is capable of generating sustained and everlasting growth in standards of living in societies.”

Canada is a major producer of weed because the agricultural sector is so large relative to the size of the population they are also major exporter is not surprisingly they both had for open access to foreign markets between 1990 and 2000 agricultural goods and food by product exports increased by more than 100% to continue their strike they will have to not only win the Battle for lowered tariffs but also battling a world prices brought experience the heavy pressure of falling prices in order to remain competitive economy and farmers will have to continue to increase their own productivity does the problem of Us Farmers and their continual contribution to lower prices in an effort to maintain profitability through productivity increases is played out on the world stage as well show the international Financial institutions such as the wto interview in the international agricultural market to stabilize prices who will be held and who will suffer if it did

How does a firm decide whether to shut down production if it has zero fixed cost? What is the implication on entry and exit in this industry?

Answer all the questions

1. Consider the general demand function: Qd = 3000 - 10P + 0.06M + 20Pr where Qd quantity demanded, P is price, M is money income and Pr is price of related goods.

i) Derive the equation for the demand function when A=$50,000 and Pr=$250

ii) Interpret the intercept and slope parameters of the demand function derived in part (i).

iii) Using the demand function in part (i) , calculate quantity demanded when the price of the good is $10.

(iv) Derive the inverse of the demand function in part (i). Using the inverse demand function calculate the demand price for 100 units of the good.

Please show all calulations for each sub-question. Thank you

1. Assess the following functions (15 points):

1. 𝑓 ′(𝑥) = 𝑥 2 + 6𝑥 + 2

2. 𝑓 ′(𝑥) = 10𝑥 − 2𝑥 2 + 5 

a. Find the stationary points.

b. Determine whether the stationary point is a maximum or minimum.

c. Draw the corresponding curves, they can be in the same graph.