Consider the consumer's optimal-search model analyzed in section 16.2 Suppose that there are nine types of stores each selling at a different price drawn from a uniform distribution where p is a subset of (1,2,3,4,5,6,7,8,9). Answer the following questions: 1. Construct a table showing the consumer's reservation price, and t
Once again, more review questions stumping me. Any assistance would be great! Firms who are attempting to engage in price discrimination will offer customers with a ______demand a higher price and customers with a (an) _______ demand a lower price. a. lower; higher. b. normal; inferior. c. less elastic; more ela
Why will a firm in a perfectly competitive industry choose not to charge a price either above or below the market price?
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
Do you think this is a good policy that is necessary to protect American workers or do you think that free trade is the answer and tariffs should be abolished?
On occasion, the US government steps in and issues a tariff on a particular product or raw material being imported into the US. This in turn causes the price of that product to rise. They do this in the attempt to protect various industries in the US. For instance, if the US Steel industry is hurting, a tariff on imported steel
Assume the graph attached represents the market demand for a patented prescription drug together with the marginal cost and average cost functions for producing the drug. (note: to simplify the problem, I have assumed that MC is constant @ $20 for all Q over 4 million, and that AFC is reduced essentially to 0 when Q reaches 5 mi
Part A: I have drawn the demand curve and I have found the area of profit and the area of consumer surplus. The question says to compute the profit and consumer surplus. I have computed the profit, but I don't know how to compute the consumer surplus. Part B: I am completely clueless as how to check to see that the first 6 th
Please help with the following problem regarding competition. In the purely competitive long-run equilibrium, P = minimum ATC = MC. Of what significance for economic efficiency is the equality of P and Minimum ATC? Of what significance is the equality of P and MC? Distinguish between productive efficiency and allocative
Consider a firms short run decision to hire workers. assume that a firm produces goods for sale in a perfectly competitive market. labor markets are competitive as well. assume the production function is Q=40L-3L(squared). One unit of a good is sold for $2 a) why does capital not appear in the production function? b) der
This is actually a "part b" whereas I've finished "part a". Here is the practice problem: Suppose you are a patent officer. Assume that the marginal social cost of the patent increases over time and is given by MSC = 17 * t^2 [by "^2" I mean Squared]. The marginal social benefit of innovation decreases over time: MSBI =
I am trying to figure out the answers to these question. Nothing in my book guides me towards the solution. I just want verification that I am doing the homework right Jerry's Quarry sells building stone in a perfectly competitive market. At its current level of building stone production, Jerry's quarry has marginal cost
I need help figuring out the following practice problem - I have solved for some solutions but am not sure of my answers. Please look below and solve alebraically - show work so I know how you got your answers. Question P = 28 - 0.0008Q TC = 120,000 + 0.0006Q2 Where Q is the number of cable subscrib
I think I'm understanding this better, but I still need some help. I had another BrainMass TA (101733) who was very helpful with concepts (thank you), but I want to cross-reference the response I received with another independent viewpoint... Here is a discussion point that was put to the class, and I'll transcribe it verbat
In the situation of imperfect competition, the relation between market price P and marginal revenue MR for each supplying firm is that: a) P is less than MR at all or most output levels. B) P is greater than MR at all or most output levels. c) P is the same as MR at all output levels d) P is either less than MR at pa
How do perfectly competitive markets respond to economic losses for firms?