The following information is available about a firm:
Output 0 1 2 3 4 5 6 7 8
Total Revenue - 30 60 9 120 150 180 210 240
Total Costs 70 100 122 135 140 145 154 179 220
a) Is the firm producing under perfect or imperfect competit
1. If an industry is perfectly competitive then a single producer is a price taker? Why? Explain with examples.
2. What is the supply curve of a perfectly competitive firm? Is it different from that of the market supply curve? Explain with examples
Imperfectmarket conditions exist in the real-world of corporate finance. Describe one cause and its accompanying consequence to an imperfectmarket. Is there anything that can be done to eliminate the cause you have described?
Part 1
Summarize the differences between the following four market types.
1. Monopoly
2. Oligopoly
3. Perfect Competition
4. Monopolistic Competition
Part 2
Provide a general explanation of how businesses may maximize profits within each of the aforementioned market types.
Use the following demand schedule to determine total revenueandmarginalrevenue for each possible level of sales:
Product Price Quality Demanded Total RevenueMarginalRevenue
$2 0 $-----------
2 1 ------------ ----------------
2 2 ----------- ------------------
2 3 ----------- ----------------
2 4 --
18. If the production function is Q = K^5L^5 and capital is fixed at 4 units, then the average product of labor when L = 25 is (hint: raising a variable to the 0.5 power is the same as taking the square root):
a) 2/5.
b) 1/5.
c) 10.
d) none of the above.
20. The change in total revenue attributable to the last unit of
With a patent on a drug, it has had very little competitionand this drug has been a major source of company revenueand profit. However, the patent will soon expire and other drug-manufacturing firms seem to be preparing to enter the market in competition with Happy Pets. Describe the changes in pricing that are likely as compe
1. Price discrimination is _____.
illegal in most economically developed nations
very rare in a market economy
common, and evidence of monopoly
all of the above
2. Market power is the ability _____.
to set prices and quantities sold
of capitalists to exploit the w
