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General Equilibrium

Graphical solution for economic profit and loss for a firm

I semi understand the concepts of the questions but not how to show the work. Graphs have been attached. PROBLEM 3. a. Determine whether the typical firms depicted below are earning profits or losses then show graphically how economic forces will cause the industry to move to a zero economic profit for the typical firm. B


Consider a tropical island economy with two sectors, souvenir manufacturing and hospitality (hotels). Both sectors are perfectly competitive, and workers are equally able and willing to work in either industry. Only foreign tourists demand souvenirs and hotel stays, so changes in the domestic labor market do not affect the produ

Cournot and Bertrand Equilibrium

Assume that Smith Inc. and Wang, Inc. compete in an oligopolistic setting. They produce a homogeneous product and face the following industry demand curve: P = 20 - .01Q Where Q = Q1 + Q2 a. Each firm faces a marginal cost of $10. Find the equilibrium quantity produced by each firm in the Cournot equilibrium. What

Demand supply curves, Implicit and explicit costs

Please see the attached file for complete Problems. Work done with the help of equation writer may not print here. 1.Less is a computer programmer who earned $35,000 in 1999. But with the new millennium, Lee decided to try a new career. He loves water sports, and in 2000 he opened a body board manufacturing business. At

Discussion on Supply and Demand & the Concept of Elasticity

1. Mr. Capon is a butcher who recently raised the price of steak at his market from $1:50 a pound to $2:00 a pound. Correspondingly his sales dropped from 200 pounds per day to 100 pounds per day. Is the demand for steak at Capon's market elastic or inelastic? Explain. (show all works please) Given this circumstance, advise Mr.


Assume the commodity market and the money market for an economy are described by the following IS and LM curve. IS: Y = 11,000 - 250r; LM: Y = 8,000 + 250r. a. Compute the equilibrium interest rate (r) and equilibrium real output (Y). b. Suppose that fiscal policymakers raise taxes and cut government spending. As a resu

Imperfectly competitive markets

What do economists mean by the term "imperfectly competitive markets"? How do market prices differ between perfectly and imperfectly competitive markets?

Supply and Demand

Purpose of Assignment - The purpose of this assignment is to analyze how an event will influence the market equilibrium. Background: Suppose the weather in Florida was extremely cold one winter. This event would affect the market for coffee in Florida, causing the demand curve to shift to the right. Remember an event that c

Macroeconomics (Supply and Demand Analysis)

Supply and Demand Analysis. a) Illustrate the market for a good by drawing the industry's demand and supply curves. On the graph, identify the equilibrium price and the equilibrium quantity. Be sure to label all axes and curves. b). If the market price is less than the equilibrium price, what is the relationship of quant

Environmental Economics

Q1) Demand for milk is Q=1000-5p long run supply function for milk is Q=4p-80. if government's climate change policy is based on polluters pays tax and it decides to tax milk. a)how will this tax affect equilibrium in the milk market? b)how would the burden be shared between buyers and sellers of milk? c)what is the excess b

Gus the cab driver rents a cab and pays for gas. In each of the following circumstances, describe the (A) short-run effects & (B) long-run effects on the price and quantity of rides Gus offers.

Part I Gus the cab driver rents a cab and pays for gas. In each of the following circumstances, describe the (A) short-run effects & (B) long-run effects on the price and quantity of rides Gus offers. (Use Graphs to aid understanding in A & B) Question 1 : The city imposes a $1 excise tax on cab rides, but exempts Gus fr

Why are barriers to entry crucial to the success of a monopoly firm?

Please see the attached file. -In everyday discussions, people tend to talk about monopoly firms "setting high prices," but in this chapter we have talked about choosing a profit-maximizing level of output. Are these two approaches saying the same thing? What kind of rule would a monopoly follow if it wished to choose a pro

In choosing whether to deliver to six or seven neighborhoods, Pizza Spinners has to take into account not only its own costs, but also the delivery area response of its competitor Harry's Pizzeria.

Hello, Please review attached document. I need help with this questions, I am finding it hard to solve the game theory questions. Thanks in advance Jummy Game Theory 1a. In choosing whether to deliver to six or seven neighborhoods, Pizza Spinners has to take into account not only its own costs, but also the delive

Marginal Revenue and Cost

2. A firm produces output with a constant marginal cost MC = 2. Its output is consumed by two types of customers "a" and "b", with demand functions: Pa = 10 (1/10) Q Pb = 18 - (1/5) Q, respectively. 2.1. Calculate marginal revenue for each market. 2.2. For each market, graph demand, marginal cost and marginal revenue, and sh

Commodity Subsidy effect on Consumer/Producer Surplus

The inverse market demand curve is P=140-Q, and the inverse supply curve is P=20+Q. Now suppose a commodity subsidy of $20 is given for each unit of production. In this new distorted market equilibrium, compute the following: 1. equilibrium demand price 2. equilibrium supply price 3. equilibrium quantity 4. the additional

Long Run Equilibrium Prices

All firms in a competitive industry have long-run total cost curves given by LTC = Q^3 - 10Q^2 + 36q, and LTC = q^2 + 4q where Q is the firm's level of output. I am having trouble finding the industry's long term equilibrium price as well as the long term equilibrium output level for each LTC.

Compute new equilibrium and explain results ISLM

Y = 1550 - 2400i = 600 + 3000i 950 = 5400i i = 0.176 substitute into IS: Y= 1550 - 2400*0.176 = 1127 Then substitute Y and i into C and I: C= 300+.3(Y-T) = 300 + 0.3 * (1127 - 250) = 563.1 I= 250+.2Y-1200i = 250 + 0.2* 1127 - 1200 * 0.176 = 264.2 3. Then assume M/P rises to 1890 and solve for the new Y and i. h

Equilibrium in Monopoly

In monopoly with Marginal Cost of $8 per unit, zero fixed cost, inverse demand function of P=38-Q what would be the profits in equilibrium: $345, $225, or $120. Please show how this was solved.

Manegerial Economics

9 The profits of Du Pont de Nemours and Company in 1997 were about $2.4 billion. Does this mean that Du Pont's economic profit equaled $2.4 billion? Why or why not? 18 If the demand curve for wheat in the United States is P = 12.4 - 4QD where P is the farm price of wheat (in dollars per bushel) and QD is the quantity of whe

Marginal Willingness to Pay/Government Fixing Quantity

Please help with this problem. I'm not looking for a final answer, but I am definitely looking for the mathematical approach used. Thank you! MB1=150-Q1 is the marginal willingness to pay, or marginal benefit, function for Consumer 1 who consumes Q1 of the commodity Q per month. For example, when Q1=1, MB=149, meaning that th

price and the quantity of equilibrium sales

Please give your answers in writing and with use of relevant diagrams and indicate what will happen to the price and the quantity of equilibrium sales under each circumstance. Demand for refrigerators is often described as cyclical and very sensitive to refrigerator prices and interest rates. Given these characteristics, des