Microeconomics Answers

Indifference curve analysis is not much use because it only tell us that the demand curves slope down except when they don't. Discuss

A firm’s market power can be measured by its ability to raise price above marginal cost. Relative to the level of marginal cost, this measure is (P –MC)/MC. How do you expect this to be related to the elasticity of demand for the monopolist’s output?

A two-firm coal cartel that produces at a constant marginal cost of £22 faces a market inverse demand curve of P = 95 – 0.43Q. Initially, both firms agree to act like a monopolist, each producing 42.44 tonnes of coal. If one of the firms cheats on the agreement (assuming the other firm is compliant and continues to produce at 42.44 tonnes), how many tons of coal will the cheating firm produce?

Explain the 3 stages of production. Hint use graphs

2.a. When the price of café lattes rises from R15 to R20, the quantity demanded decreases from 2000 to 1200 café lattes per day. What is the price elasticity of demand for café lattes (using the arc formula)? (5 marks).

A perfect competitive industry faces a demand curve represented by Q = 25,000 – 1000P.

Also suppose that an individual firm belonging to that industry faces a total cost function given by TC (q) = 40q – q2 + 0.01q3 Here q represents quantity of output produced by an individual firm, Q is the total industry output and P is the price. What would be the equilibrium market price? How much does each firm produce in equilibrium? and also find how many firms would be there in the industry in the long run?

The cost of sunflower seeds has increased. Sunflower seeds are an input when sunflowers are produced. Explain verbally how this change will affect the market for sunflowers, You are allowed to use a diagram to explain your answer,

merchandise exports= 82.1, merchandise imports= 128.7, invisibles= 29.9, services= 18.7, transfers= 17.0, income[net]= -5.8, capital accounts= 4.8, errors= -0.3. calculate trade balance

The population in the country C descreases, due to a lower birth rate. At the same time, there is an increase in the cost of fertilizer which is used to grow vegetables. Explain how the market for vegetables will be affected by the changes. Explain how the equilibrium price and equilibrium quantity will be affected by these changes

Identify the decision made using by proton could reduce the cost of production .