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(a) The market demand and supply equations for theme park in a city are given by P = 30 – 0.005QD and P = 10 + 0.005QS, where P is the price in dollars and QD is the quantity of theme-park tickets demanded and QS is the quantity of theme park ticket supplied.
i) Solve for the equilibrium price and quantity of theme park tickets and compute the consumer surplus and producer surplus. Support your answers with a graph of the theme park tickets market.
(ii) Explain the implications of the welfare of consumers, producers and the society when the price of theme park ticket is fixed at $15. Support your answers with a graph of the theme park tickets market.
Given the demand equation Q=250-50P . Determine the total revenue and marginal revenue functions. Does this situation occur in a perfectly competitive market? If yes why? If not why not?
37. In a perfectly competitive and constant-cost industry demand is given by Q = 2000 - 2P. The short total cost function at the scale of production that minimizes long-run costs for each identical firm is TC = 1000 + 100q + 10q2.
A. What will the long-run price be in this industry? How many firms will there be in long-run equilibrium?
B. What is the equation of the short-run supply curve if the industry is in long-run equilibrium?
C. Suppose that demand in this industry increases to: Q = 4000 - 2P. What will the new long run price be in this industry and how many firms will there be?
d. Describe how the industry will adjust to reach the new long-run equilibrium and illustrate your answer by drawing a graph of the firm and a graph of the industry.
Suppose cost of production of a firm is given by:
TC=128+50Q-16Q^2+2Q^3
What amount of the product should be produced to maximize profit of the firm if price per unit output is 74? Find the maximum profit or loss.
19. Suppose a given firm operating in a perfectly competitively market.
TFC = birr 600
TVC = birr 500 and TR = birr 700.
Should the firm stay in the business? What will be you answer if the TR changes to birr 450?
14. The total cost function of a firm is given by c = 100 + 40 q + 5q2.
A. Find Total fixed cost
B. Find the Marginal cost equation and the marginal cost of the 5th unit
C. Find Average variable cost equation and the AVC of the 4th unit
D. Find average fixed cost equation and the AVC of the 6th unit
E. Find average total cost equation and the ATC of the 3rd u
Illustrate the market for alcohol, labeling the demand curve, the social-value curve, the supply curve, the social-cost curve, the market equilibrium level of output, and the efficient level of output.
Consider the market for fire extinguishers.
a. Why might fire extinguishers exhibit positive externalities?
b. Draw a graph of the market for fire extinguishers, labeling the demand curve, the social-value curve, the supply curve, and the social-cost curve.
c. Indicate the market equilibrium level of output and the efficient level of output. Give an intuitive explanation for why these quantities differ.
d. If the external benefit is $10 per extinguisher, describe a government policy that would yield the efficient outcome.
Consider the market for fire extinguishers.
a. Why might fire extinguishers exhibit positive externalities?
b. Draw a graph of the market for fire extinguishers, labeling the demand curve, the social-value curve, the supply curve, and the social-cost curve.
c. Indicate the market equilibrium level of output and the efficient level of output. Give an intuitive explanation for why these quantities differ.
d. If the external benefit is $10 per extinguisher, describe a government policy that would yield the efficient outcome.
A worker's total earnings for one day is $100. He received a $20 fixed payment and consumes 14 hours of leisure. What is the hourly wage rate? Show solutions
