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# General Equilibrium

### Findind equilbrium for monopolistically competitive firm

At its current output level of X = 10, a monopolistically competitive firm has MR = 4, MC =4 ,ATC= 6, and P=8. Is this market in long-run equilibrium? If not, please describe the adjustment process necessary to achieve long-run equilibrium.

### Profit maximizing equilibrium and demand function

A market's total demand is given by P = 80-(z/2). This market is supplied by a "dominant firm" and by other, relatively "small firms". The small firms' total supply is given by P=4y. The dominant firm's total cost function is TC = (x^2)/20 + (17x/9) + 10, marginal cost function is MC = (x/10) + 17/9, marginal revenue curve is MR

### 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.

### Externalities: Pollution - Optimal Effluent Fee for Society

A. The cost of pollution emanating from the chemical industry (in \$ Bil) is: C = 3P + 3P^2 The cost of Pollution controls (in \$ Bil) is: C= 7 - 5P a. What is the optimal effluent fee from society's point of view? b. If the cost of pollution control falls by \$1 billion for every level of pollution would your answer change?

### Saving Function

You are given the following data concerning Freedonia, a legendary country: (1) Consumption function: C = 200 + .8Y (2) Investment Function: I = 100 (3) AE is equal to C + I (4) AE = Y a. What is the marginal propensity to consume in Freedonia, and what is the marginal prosperity to save? MPC is C/Y, 1 MINUS MPC IS THE

### Supply and demand

QD = 600 - 100P; QS = -150 + 150P, where P is price in dollars, Q D is quantity demanded in millions of gallons per year, and Q S is quantity supplied in millions of gallons per year. 1.Create demand and supply tables corresponding to these equations and determine equilibrium price and quantity. Now suppose the U.S. government

### NEED HELP WITH MICRO GRAPH Q's

Sir/Ma'am, I am having trouble understanding Quantity Demand and Quantity Supplied. 2. Suppose the demand and supply curves for eggs in the United States are given by the following equations: Qd = 100 - 20P Qs = 10 + 40P Where Qd = millions of dozens of eggs Americans would like to buy each year; Qs = millions of dozens

### Equilibrium

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

### Inverse Market Demand: Equilibrium Output, Price and Profits

The inverse market demand in a homogeneous product is P=100-2(Q1+Q2) and Cost are C1(Q2)=12Q1 and C2(Q2)=20Q2. A. Determine the reaction function for each firm. B. Calculate each firm's equilibrium output. C. Calculate the equilibrium market price. D. Calculate the profit each firm earns in equilibrium.

### the equilibrium interest rate

Using a figure similar to Figure 14-11, explain how the money market and the loanable funds market react to a reduction in the supply in the short-run. See Attached

### The excess burden

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

### Bertrand & Cournot Models

Question 1: Consider the Bertrand model of price competition with two firms.Denote firm 1's (resp. firm 2's)marginal cost by c1(resp. c2),and assume c1< c2. Assume that the demand function x is given by x(p)= a-p,with a > c2 so that x(c2) > 0. Find all Nash equilibria of this model. Question 2: Consider a two-firm Cournot

### 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

### Suppose you are an economic consultant for a large company that produces and sells lollipops that are shaped like the faces of Hollywood celebrities.

A. Suppose you are an economic consultant for a large company that produces and sells lollipops that are shaped like the faces of Hollywood celebrities. The company has shops in the major cities around the country and also sells by mail order catalog. As an economic consultant, you have estimated the elasticity of demand for sto

### 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

### Player's dominant strategy

See attached problem. 1. What is the player's dominant strategy? 2. What is the Nash Equilibrium? 3. What are the strategy pairs by aggregate payoff? 4. Can the output with the highest aggregate payoff be sustained in equilibrium? Why or why not?

### Rock, Paper, Scissors and Game Theory

Please see attachment. Consider the game of Rock, Paper, Scissors. Suppose that Player 1 has a higher payoff when he wins with Rock than when he wins with either Paper or Scissors. Thus, the normal form version of the game is now: Player 1 Rock Paper Scissors Rock 0,0 -1,1 5,-1 Player 2 Paper 1,-1 0,0 -1,1 Scis

### How supply shocks affect supply and demand curves.

Consider the following event: Due to severe damage, a gas pipeline supplying gas to Arizona was shut down for a few weeks in the summer of 2003. Gas became scarce in Arizona, and prices rose, causing consumers to panic. Address the following questions in your analysis of this event's affect on the market equilibrium: 1. Wa

### Long-Run Equilibrium Price Level

Consider the situation: A country's long-run equilibrium price level has increased, but the position of its aggregate demand schedule has changed. You need to answer the following questions: ?What has led to the country's increase in the long-run equilibrium price level and the change in the position of its aggregate dem

### current long-run equilibrium level of real GDP

Working with Graphs Consider the graph below, and answer the following questions: a)What is the current long-run equilibrium level of real GDP? b)What is the current long-run equilibrium price level? c)If the economy grows sufficiently at \$2 trillion, real GDP remains forthcoming in the long run, and the aggregate d

### Basic Oligopoly Models

Consider a duopoly with product differentiation in which the demand and cost function are: Q1 = 88 - 4P1 + 2P2 C1 = 10q1 Q2 = 56 + 2P1 - 4P2 C2 = 8Q2 Derive a price reaction function for each firm on the assumption that each maximizes its profit with respect to its own - price elasticity Determine equilibrium value of p

### 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

### The primary difference between a change in supply and a change in the quantity supplied is

The primary difference between a change in supply and a change in the quantity supplied is a. change in quantity supplied is a movement along the supply curve, while a change in supply is a shift in the supply curve b. Both a change in quantity supplied and a change in supply are movements along the supply curve, only in diffe