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MBAA 523 Problem Set 5 Assignment

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Question;For;each of the following market structure characteristics, insert the correct;Market Type(s). There may be more than one. Use these abbreviations: PC ? perfect competition, MC ? monopolistic;competition, and M ? monopoly.;Market;Structure Characteristic;Market;Type;Advertising is not;effective for the individual firm.;MR MR;Product is unique.;In equilibrium;products cannot be produced at a lower cost or sold at lower price.;Economies of scale are;often a barrier to entry.;Products have many;close substitutes.;Assume;a perfectly competitive market structure. Complete the diagram to show the;profit maximizing price and quantity. Label each (use Insert textbox). Is the;firm earning economic profits or losses?;If so, what will occur over the long-term?;3.A firm sells its product in a perfectly;competitive market where other firms charge a price of $80 per unit. The firm?s;costs are C(Q) = 40 + 8Q + 2Q2. Show your computations.;a. How much output should the firm;produce in the short-run?;b. What price should the firm charge;in the short-run?;c. What are the firm?s short-run;profits?;d. What adjustments should be;anticipated in the long-run?;4. Complete the diagram;showing the profit maximizing price and quantity. Label each. Show and label;the deadweight loss (In MS Word, use Insert/Curved Connector, a curved line).;5. A firm is;a monopoly with demand and cost functions given by P = 200 ? 2Q and C(Q) =;2,000 + 3Q2respectively. Show your computations.;a. Show the equations for MR and MC.;b. Compute the profit maximizing;quantity.;c. What is the price at the profit;maximizing quantity?;d. Compute total revenue.;e. Compute total cost.;f. What are the profits?

 

Paper#56834 | Written in 18-Jul-2015

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