Microeconomics Answers

Suppose that a change ? ( 2 ) in the price of bread from R10 to R12.50 leads to a change in the quantity demanded of bread from 65 90 units. Use the arc units to elasticity method to calculate and interpret the price elasticity of demand for bread ( 4 )

A monopolist faces the demand curve Q = 60-P/2. The cost function is C = Q^2. Find the output that maximises this monopolist's profits. What are the prices at profits and that output? Find the elasticity of demand at the profit maximising output.

A firm in a perfectly competitive market has the following cost function: C = 1/3q^3 - 5q^2 + 3q + 10. If the market clearing price is 6, obtain the profit maximising level of output.

Every year, the housing market in Monotone, Arizona, has the same experience: The demand curve for housing shifts rightward by 500 homes, 500 new homes are built, and the price of the average home doesn't change. Using supply and demand diagrams, illustrate how each of the following new events, ceteris paribus, would affect the price of homes in Monotone during the current year, and state whether the price rises or falls.
c. The Monotone city council passes a new zoning law that prevents any new home construction in Monotone during the year.
d. Because of the new zoning law, and the resulting change in home prices, people begin to think that homes in Monotone are a better investment than they had thought before.
e. 500 new homes are built in Monotone during the year, but that same year, an earthquake destroys 2,000 preexisting homes. As a result of the earthquake, 3,000 homeowners decide they no longer want to live or own homes in Monotone.

”Under perfect competition, all market participants are price takers”.
Explain the statement

Suppose that a change in the price of bread from R10 to R12.50 leads to a change in the quantity demanded of bread from 65 units to 90 units. Use the arc elasticity method to calculate and interpret the price elasticity of demand for bread

The government has lowered taxes on cattle ranchers; the supply of beef will _______________. What determinant of supply causes this change? _________________ Draw a graph showing the change

Explain each of the following statements using supply and demand diagrams,
when the weather turns warmer in Manila every summer, the prices of hotel rooms in Baguio City rises.

Given the cost function TC = 9q^2 + 2q + 8100. (i)Find marigibal cost (MC) and average cost (AC) as function of q. (ii) Show that MC<AC, AC is falling, and MC>AC, AC is rising.