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Think about a monopolist, the market demand function is: QD = 100/P2, the monopolist’s cost function is: C(Q) = 2Q.
- Based on the definition of price elasticity of demand: eD,P= (dQD/QD)/(dP/P), what is the price elasticity of the market demand curve in this case?
- What is the monopolist’s optimal price based on the inverse elasticity rule?
- If the government decide to impose a $1 per unit tax on the output, please use the inverse elasticity rule to decide if the monopolist’s optimal price will increase more than $1 after the tax?
2.given TC=400-50Q+Q2 P=80 .find the optimal quantity produced and sold by the firm so that they are maximizing profits
given TC=70+30Q+2Q2. P=40 find the optimalquantity produced and sold by the firms so that they are maximizing profits
. You need to have $50,000 at the end of 10 years. To accumulate this sum, you have decided to save a certain amount at the end of each of the next 10 years and deposit it in the bank. The bank pays 8 percent interest compounded annually for long-term deposits. How much will you have to save each year (to the nearest dollar)?
Beatrice Luigi Gomez established a fashion designing service business in Cebu City on December 2021 which she
named Top 5 Best Designs. Below are the following completed transactions during the first year of business.
Dec. 1 Beatrice transferred cash from a personal account to an account to be used for the business, P243,000.
3 Beatrice invested in the business her personal computer equipment having a fair market value of P34,000.
4 Bought office equipment on account from Robinsons Cybergate, P13,740.
5 Paid rent covering 1 year amounting P70,000. (Use Asset Method)
6 Bought a used service vehicle car for P93,000, paying P45,000 down, with the balance due in thirty days.
9 Received invoice and paid 1-year insurance premium to Cacawa Fidelity company, P25,000. (Use Asse
Market demand is given as Qd = 300 – 2P. Market supply is given as Qs = 2P + 100. In a perfectly competitive equilibrium, what will be price and quantity?
What is most likely to happen to inflation and real output growth if a government raises taxes and its economy has a year of excellent weather for growing crops? Illustrate your verbal answer with a graph. Label everything!
(4) Consider a market with the following demand and supply curves:
Q (p) = 20 – 2P
Q (p) = - 10 + 3P
(b)Suppose the government imposed a sales tax of $0.80 per unit of output sold, find the price paid by the consumer, the price received by the supplier, the equilibrium quantity transacted, and the total tax revenue received by the government.
(c)What do you think is the purpose for such tax policy? In your explanation, include a brief discussion of the importance of price elasticity of demand in the choice of commodities to be taxed in order to achieve specific policy goal(s).
(3)(a) Suppose that the market for a particular type of product purchased is perfectly competitive, what questions would you ask to determine the validity of the claim?
(b) Explain, with appropriate graphical illustration(s), why firms in a perfectly competitive market would earn zero economic profits in the long run.
(4) Consider a market with the following demand and supply curves:
Q (p) = 20 – 2P
Q (p) = - 10 + 3P
(a)Find the equilibrium price and the equilibrium quantity transacted in this market.
The Nottinghamshire Research Observatory in England calculated that students who attend Nottingham Technical University spend about £2,760 each in the local economy for a total of £50 million. In total, the impact of their spending on the local economy is £ million. Calculate the size of the student spending multiplier.
