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Consider the inverse demand curve p = 144 - 20 and the cost function C(Q) = 100+ 4Q. If the market were competitive, calculate the incidence of a specific tax, t = 6, that falls on consumers. Calculate the incidence of the same tax if the market were instead a monopoly.
Draw an example of a monopoly with a linear demand curve and a constant marginal cost curve. a. Show the profit-maximizing price and output, p* and Q*, and identify the areas of consumer surplus, producer surplus, and deadweight loss. Also show the quantity, Q, that would be pro duced if the monopoly were to act like a price taker.. b. Now suppose that the demand curve is a smooth concave-to-the-origin curve (which hits both axes) that is tangent to the original demand curve at the point (Q, p"). Explain why this monopoly equilibrium is the same as with the linear demand curve. Show how much output the firm would pro duce if it acted like a price taker. Show how the welfare areas change. c. How would your answer in part a change if the demand curve is a smooth convex-to-the-origin curve (which hits both axes) that is tangent to the original demand curve at the point (Q", p*)?
Covid-19 has devasted the world. Discuss how Covid-19 has devastated your economy. What are some of the macroeconomic policy responses to the Covid-19 crisis?
Early last year Fijian Government closed its boarders. Curfew hours and containment zones were introduced to stop the spread of Covid 19 disease. Major hotels, shops and connected sectors were closed and as a result many individuals were out of employment. This business remained closed till to date.
As Macroeconomics student, Discuss the economic impact of Covid-19 on your economy and provide 5 macroeconomics policy responses to Covid-19 crisis?
AT&T Inc.. the large U.S. phone company and the one-time monopoly, left the pay-phone business because people were switching to wireless phones (Crayton Harrison, "AT&T to Disconnect Pay Phone Business After 129 Years," http://www. Bloomberg.com, December 3, 2007). The number of wireless subscribers quadrupled in the past decade: 80% of U.S. phone users now have mobile phones. Consequently, the number of pay phones fell from 2.6 million at the peak in 1998 to 1 million in 2006. (But where will Clark Kent go to change into Super man now?) Use graphs to explain why a monopoly exits in a market when its demand curve shifts to the left.
Suppose that the inverse demand for San Francisco cable car rides is p = 10 - Q/1,000, where p is the price per ride and Q is the number of rides per day. Suppose the objective of San Francisco's Municipal per day. Authority (the cable car operator) is to maximize its revenues. What is the revenue maximizing price? Suppose that San Francisco calculates that the city's businesses benefit from tourists and residents riding on the city's cable cars at $4 per ride. If the city's objective is to maximize the sum of the cable car revenues and the economic impact, what is the optimal price?
The table shows the output of chairs at a factory when different numbers of workers are employed.
Number of workers 1 2 3 4 5
Number of chairs produced 6 17 27 32 30
Show where diminishing marginal returns to labour will set in.
The table shows a firm’s total and marginal costs.
Output Total cost ($) Marginal cost ($)
1 200 20
2 215 15
3 225 10
4 240 15
5 260 20
Calculate the Average Fixed Cost (AFC) of producing 6 units of output.
Q=20 - I/2 P
•Where Q is the monthly quantity demanded of compact discs (CDs) in million and P is their price.
–Draw a demand curve given by this equation between CD prices of £1 and £20
–A new format results in a fall in demand of CDs of 5 million per month at any given price
–What is the new formula for quantity demanded of CDs?
–Plot the new demand curve on your diagram.
The table shows the production of a firm.
Production (tonnes) Total Cost ($)
0 20
1 30
2 35
3 40
4 45
5 50
Calculate the Average Variable Cost (AVC) of producing 5 tonnes of output.
