... demand at P=9 is = ( 2) = = −0. 82 Q ΔP 22 22 Elasticity of demand at P= 12 is P ΔQ 12 24 = ( 2) = = −1.5 Q ΔP 16 16 c What is the price elasticity of supply at $9? At $ 12? Elasticity of supply at ... equilibrium Quantity demanded and supplied are QD = 26 26.4 -21 2.6(3.5)=18 82. 3, and QS = 1944 + 20 7(3.5) = 26 68.5 Excess supply is therefore 26 68.5-18 82. 3=786 .2 million bushels The government must purchase ... ⎞ , or g = 0 .25 ⎝ 20 ⎠ The values for d and b may be found with equations 2. 5a and 2. 5b in Section 2. 6 We know that ES = 0 .2, P* = 2, and Q* = 20 Therefore, 0 .2 = d ⎛ ⎞ , or d = ⎝ 20 ⎠ Also, ED...
... and the Consumer Price Index from 1980 to 20 01 ˇ 1980 1985 1990 1995 20 00 20 01 CPI 100 130.58 158. 62 184.95 20 8.98 21 4.93 $1.88 $2. 12 $1.99 $1.61 $2. 52 $3.30 Retail Price of butter (salted, grade ... $2. 98 1985 82. 3 1985 $2. 58 1990 100 1990 $1.99 1995 116.6 1995 $1.38 20 00 131.8 20 00 $1.91 20 01 135.6 20 01 $2. 43 d What is the percentage change in the real price (1990 dollars) from 1980 to 20 01? ... 1990 1995 20 00 20 01 $1.88 $1. 62 $1 .25 $0.87 $1 .21 $1.54 Since 1980 the real price of butter has decreased b What is the percentage change in the real price (1980 dollars) from 1980 to 20 01? Percentage...
... curve are (5,10), (10,5), (25 ,2) , and (2, 25) Erin receives a utility of 2* 10*10*5*5=500 from the bundle (10,5) Her indifference curve is 2 represented by the equation 500= 2F C , or 50=FC This is ... utility of 120 0, so her indifference curve is given by 26 Chapter 3: Consumer Behavior c the equation 10FC= 120 0, or FC= 120 Some bundles on this indifference curve are ( 12, 10), (10, 12) , (3,40), ... (3,40), and (40,3) For Erin, this bundle gives her a utility 2 of 28 80, so her indifference curve is given by the equation 28 80= 2F C , or FC= 120 This is the same indifference curve as Bridget Do you...
... AC = b + cQ + dQ = b + c⎛ ⎝ 92 −c ⎞ 2d ⎛ ⎠ + d⎝ −c ⎞ 2d ⎠ , or Chapter 7: The Costs of Production AC = b − implying b > c2 2d + c2 =b− 4d 2c 4d + c2 4d = b− c2 4d > c2 Because c >0 and d > 0, ... average cost per engine? q To produce q = 25 0 engines we need labor teams L = or L=10 Average costs 25 are given by AC(q = 25 0) = c 50,000 + 22 00 (25 0) = 24 00 25 0 You are asked to make recommendations ... Production TC(q) = rK +wL +20 00q = (10, 000)(5) + (5, 000)( q ) + 2, 000 q 25 TC(q) = 50, 000 +22 00q The average cost function is then given by: AC(q) = TC(q) 50,000 + 22 00q = q q and the marginal...
... to area a Numerically: a = (21 .5-19 .2) (14.6)+(17.4-14.6) (21 .5-19 .2) (.5)=36.8 b = (17.4-14.6) (21 .5-19 .2) (.5)=3 .22 c = (21 .5-19 .2) (20 .4-17.4)=6.9 d = (21 .5-19 .2) (21 .1 -20 .5)(.5)=0.69 These numbers ... P: (26 .53- .28 5P)-(-8.70+1 .21 4P)=6.5 35 .23 -1.499P=6.5 P=19 .2 cents per pound 128 Chapter 9: The Analysis of Competitive Markets At a price of 19 .2 cents per pound QS = -8.70 + (1 .21 4)(19 .2) = ... A in Figure 9.6.d, which is ( 12 - 9)(6) + (0.5)(8 - 6)( 12 - 9) = $21 million P S 20 15 12 A B D C D Q 10 16 22 40 Figure 9.6.d Formatted: Bullets and Numbering 125 Chapter 9: The Analysis of...
... marginal cost: MC=4Q=90-4Q=MR Q=11 .25 For a quantity of 11 .25 , the firm will charge a price P=90 -2* 11 .25 =$67.50 level of profit is $67.50*11 .25 -100 -2* 11 .25 *11 .25 =$406 .25 b The Find the price, quantity, ... $38 (38 = 55 - 2( 8.5)), i.e., (0.5)(55 - 38)(8.5) = $ 72. 25 plus the savings on each doorstep, i.e., (38 - 12) (8.5) = $22 1 Therefore, consumer surplus is $29 3 .25 Total surplus is $26 5.50, and deadweight ... Ed = -2. 0, so 1/Ed = -1 /2; price should then be set so that: P = MC ⎛ 1⎞ ⎝ 2 = 2MC Therefore, if MC rises by 25 percent, then price will also rise by 25 percent When MC = $20 , P = $40 25 percent...
... revenue for the two markets are: P1 = 15 - Q1 MR1 = 15 - 2Q1 P2 = 25 - 2Q2 MR2 = 25 - 4Q2 The monopolist’s total cost is C = + 3(Q1 + Q2 ) What are price, output, profits, marginal revenues, and ... P1, r2 < P2, r1 + r2 < PB 198 In region Chapter 11: Pricing with Market Power II sports r1 > P1, r2 < PB - P1 channel III movie r2 > P2, r1 < PB - P2 channel IV both channels r1 > PB - P2, r2 > ... = (0.5)(Q2)(10 - P), where Q2 = − ⎛1⎞ P , or ⎝4⎠ ⎞ 26 P P ⎛ T = (0.5 )⎝ 4.0 − P ⎠ (10 − P ) = 20 − + 8 The entry fees generated by all of the 2, 000 players would be ⎛ 26 P P ⎞ (2, 000) 20 − + ⎟...
... future cash flows Thus, the stock price will not change after the announcement of increased earnings 22 Stock prices should immediately and fully rise to reflect the announcement Thus, one cannot expect...
... greater than in part a L MPL MRPL 0 - - 25 25 50 q 23 5 Chapter 14: Markets for Factor Inputs 43.75 18.75 37.5 58.75 15 30 71 .25 12. 5 25 81 .25 10 20 87.5 6 .25 12. 5 Assume that workers whose incomes ... 0 - - 20 20 40 35 15 30 47 12 24 57 10 20 65 16 70 10 23 3 Chapter 14: Markets for Factor Inputs b Suppose that the price of the product remains at $2 but that the wage rate increases to $21 Find ... part a q L MPL MRPL 0 - - 20 20 60 35 15 45 23 4 Chapter 14: Markets for Factor Inputs 47 12 36 57 10 30 65 24 70 d 15 Suppose that the price of the product remains at $2 and the wage remains at...