Microeconomics Answers

A monopolist has a constant marginal cost of 16. Consumers' inverse demand is P = 45 - 5Q. The monopolist runs a persuasive advertising campaign that costs 11 and increases consumer demand to P = 50 - 5Q.

(a) What is the gain (or loss) in the firms profits caused by the advertising campaign?

(b) When consumers' pre-advertising preferences are used to calculate welfare, what is the welfare gain (or loss) caused by the advertising campaign?

(c) When consumers' post-advertising preferences are used to calculate welfare, what is the welfare gain (or loss) caused by the advertising campaign?

Suppose you are the manager of a soccer stadium where all the tickets always have to be sold at the same price. Two matches are scheduled to be played during the next fortnight, the first between Sundowns and Pirates and the second between two first Division sides.(USE ARC PRICE ELASTICITY)
(a) Market research indicates that you can sell 40 00 tickets for the Sundowns-Pirates clash at R10 each, or 30 000 tickets at R20 each, Which option would you choose ? What is the price Elasticity of the demand for tickets for this particular game ?
(b)Likewise, market research indicates that you can sell 15 000 tickets for the first Division fixture at R10 each, or 5 000 tickets at R20 each. Which option would you choose ?What is the price elasticity of the demand for the tickets for this game ?

If you hire 20 units of labor, what will be the average product of labor? State below and show on the graph.


b. If you hire 20 units of labor, what’s the total number of pencils your firm can produce? Compute below.


c. At what amount of labor does diminishing average returns begin? State below and show on the graph.

. Use the supply-and-demand model to predict the likely consequence of the recent ban the US has placed on the importation of oil from Venezuela on the equilibrium price and quantity of oil in the US. Explain verbally and illustrate graphically. Be clear whether there is a change in supply or a change in demand. Use either hypothetical numbers on your graph or the labels P1, P2, Q1, and Q2

The market supply curves and market demand curves for books are given as follows:
Supply curve: P = 0.000002Q Demand curve: P = 11 – 0.00002Q
The short-run marginal cost curve: MC = 0.1 + 0.0009Q
Question 1. At the above short-run equilibrium level, the firm is …
1. making a profit of R1 000 000
2. making a loss of R1 000 000
3. making zero economic profit.

Question 2
Assuming all firms in the market are identical, how many firms are producing books?
1. 5 firms
2. 50 firms
3. 500 firms
4. Given the information provided, it cannot be determined.

The market supply curves and market demand curves for books are given as follows:
Supply curve: P = 0.000002Q Demand curve: P = 11 – 0.00002Q
The short-run marginal cost curve: MC = 0.1 + 0.0009Q
Assuming all firms in the market are identical, how many firms are producing books?
1. 5 firms
2. 50 firms
3. 500 firms
4. Given the information provided, it cannot be determined.

graphically explain the impact of deadly labour unrest on the market for steel

graphically illustrate and carefully explain the impact of deadly labour unrest on the market for steel.

Explain short turn equilibrium of a monopolistic firm with aid of a diagram

describe the cost function of Bamburi cement limted given by total cost (TC)=4q2+1b. find the variable cost