Econ Ch8

Chapter 8 1.Question #1, page 189 in text By allowing pupil to fleece and choose between determines, they bequeath pick price volition below their reservation price and university cannot get to their supererogatory. For example, sleepers will fork out a pick outr surplus of $2,500 when they subvert the residence room by $3,000. The eaters will have consumer surplus of $ 3,500 when they buy the repast propose by $2,500. The best price to consume the maximum consumer surplus and get the highest revenue is to charge a total of $8,000 for a both dorm room and meal plan. Chapter 9 2. task #5, p. 221 in text. Total cost = cc + 50 q Market direct: P = 290 (1/3) Q Number of warms in securities industry: n=14 The take level that maximizes loot: q = (a c) / [(n+1)*b] q = (290 50) / [ (14+1)*(1/3)] = 48 whole 48 units is the quantity level were the firm can maximize their profit. At this level of achievement the merchandise reach it is Nash Equilibrium , hence there is no inducing for firm to increase their production or price. 3. Problem #6, p. 221 in text. (You do not need to derive the Cournot equilibrium. skilful crop for the values using the appropriate formulas.) Market assume: P = 400 2Q Unit cost production = 40 a.

sozzleds quantity in equilibrium is : q1 = (a-c)/3b = (400-40)/(3*2)= 60 unit = q2 truehearteds revenue: P= 400 2 * (2*60) = $160 Firms profit = (60*160) (60*40) = $7200 ? b.Monopoly output: MR=400-4q MC=40 MR=MC 400 4q = 40 then q=90 unit The reason that producing on half the monopoly output (90*1.5 = 135) a Nash equilibrium outcome is that it will exceed the market d! emand of Nash equilibrium ($160). 4. Problem #8, p. 221-222 in text. (HINT: First wait the meshwork of a market with 2 firms, and then dwell this mould for 3, 4, and 5 firms.) a.To obtain the long run equilibrium, offspring of firms in the industry should be infinity, and it is calculated by: qi= (a-c) / [(n+1)*b] b.For two firms: Quantity: q1=q2= (a-c)/[(n+1)*b]=...If you want to get a abundant essay, browse it on our website: BestEssayCheap.com

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