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Microeconomics
why do competitive firms stay in business if they make zero profit?
Microeconomics
Assume a consumer with the utility function
U = U(X, Y) = (X + 2)(Y + 1)
M = 95, Px= 10, and Py= 5
A Set up the consumers’ budget constraint
a. Set up the constrained maximization problem, and derive the first-order conditions.
b. Find the amounts of goods X and Y the consumer will purchase in equilibrium
U = U(X, Y) = (X + 2)(Y + 1)
M = 95, Px= 10, and Py= 5
A Set up the consumers’ budget constraint
a. Set up the constrained maximization problem, and derive the first-order conditions.
b. Find the amounts of goods X and Y the consumer will purchase in equilibrium
Microeconomics
Qd = 50- 8P
Qs = -17.5 + 10P
a) At the equilibrium price calculate the consumer’ and producers’ surplus.
b) If a price floor of shs 5 is imposed on good X in this market
i) what is the new consumers’ surplus and by how much has it changed?
ii) what is the new producers’ surplus and by how much has it changed?
c) Calculate the transferred surplus. And state from who to whom is it.
d) Calculate the deadweight loss of the price floor
Qs = -17.5 + 10P
a) At the equilibrium price calculate the consumer’ and producers’ surplus.
b) If a price floor of shs 5 is imposed on good X in this market
i) what is the new consumers’ surplus and by how much has it changed?
ii) what is the new producers’ surplus and by how much has it changed?
c) Calculate the transferred surplus. And state from who to whom is it.
d) Calculate the deadweight loss of the price floor
Microeconomics
Assume a consumer with the utility function
U = U(X, Y) = (X + 2)(Y + 1) M = 95, Px= 10, and Py= 5
Set up the consumers’ budget constraint
U = U(X, Y) = (X + 2)(Y + 1) M = 95, Px= 10, and Py= 5
Set up the consumers’ budget constraint
Microeconomics
5. Consider the following national income model
Y = C+I+G+X-M
C=0.75(Y-T)
M=0.25Y
I=820
G=960
t=0.3
X=650
Find the equilibrium values of Y, C and M
Y = C+I+G+X-M
C=0.75(Y-T)
M=0.25Y
I=820
G=960
t=0.3
X=650
Find the equilibrium values of Y, C and M
Microeconomics
what is the meaning of Total Cost (TC), Total Variable Cost (TVC),Total Fixed Cost (TFC),Average Cost (AC), Average Fixed Cost (AFC), Average Variable Cost (AVC), Total Revenue (TR), Average Revenue (AR) and Marginal Revenue (MR)
( WITH REFERENCES)
( WITH REFERENCES)
Microeconomics
The utility function is:
u(x,y)=32x^0.5+y
The marginal utilities are:
MUx=16x^-.5 MUy= 1 How do I derive the demand functions for x and y?
Thank you!
u(x,y)=32x^0.5+y
The marginal utilities are:
MUx=16x^-.5 MUy= 1 How do I derive the demand functions for x and y?
Thank you!
Microeconomics
explain how and why the relationship between demand curve and marginal revenue curve differs between a unregulated monopoly and a perfect competitive firm.
Microeconomics
Do you think that a reduction in the firm’s variable cost would be beneficial for the company in the short run? If yes, why, If no, why not?
What is the relation between the firm’s output and its marginal cost?
Suggest how the firm can reduce the total cost of production
What is your explanation on prevailing cost conditions of the chosen firm?
What is the relation between the firm’s output and its marginal cost?
Suggest how the firm can reduce the total cost of production
What is your explanation on prevailing cost conditions of the chosen firm?
Microeconomics
Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm). (Photos of your work are not accepted)
Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. What happens to the firm’s profits? Does price discrimination lead to a more efficient or less efficient outcome? Why or why not?
Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. What happens to the firm’s profits? Does price discrimination lead to a more efficient or less efficient outcome? Why or why not?
