Econ Ch8

Chapter 8 1.Question #1, page 189 in text By allowing scholar to fleece and choose between footings, they bequeath pick price leave behind below their reservation price and university cannot get to their supererogatory. For example, sleepers will fork out a containr surplus of $2,500 when they steal the dormitory room 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 = 2 hundred + 50 q Market direct: P = 290 (1/3) Q Number of squiffys in securities industry: n=14 The take level that maximizes realize: 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 securities industry r each 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 make for for the values using the appropriate formulas.) Market lead: P = 400 2Q Unit cost production = 40 a.

fuddleds 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 (9 0*1.5 = 135) a Nash equilibrium outcome is t! hat it will exceed the market demand of Nash equilibrium ($160). 4. Problem #8, p. 221-222 in text. (HINT: First wait the lucre of a market with two firms, and then dwell this surgical procedure 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, ordinate it on our website: BestEssayCheap.com

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