Unit 3B Review Challenges
Please browse and stick to the directions carefully for each component. This task is due Thursday, January eleven and it will depend double in your homework grade. I will praise additional points for students who answer the questions in bold properly.
Part A: Please response one of the two problems pertaining to Chapter 14, p. 308-309.
1 . Suppose the book-printing market is competitive and starts in a long-run equilibrium. a. Draw a diagram talking about the typical firm in the industry. m. Hi-Tech Creating Company invents a new procedure that dramatically reduces the price of printing ebooks. What happens to Hi-Tech's profits and price of books inside the short run the moment Hi-Tech's patent prevents other firms by using the new technology? c. What are the results in the long run when the patent expires and other firms are free to work with the technology?
2 . Suppose you will discover 1, 000 hot pretzel stands within NYC. Every stand provides the usual U-shaped ATC curve. The market demand curve for pretzels inclines downward, as well as the market to get pretzels is in the long-run competitive equilibrium. a. Draw the current equilibrium, applying graphs for the entire market and for an individual pretzel stand. b. The city makes a decision to restrict the quantity of pretzel-stand licenses, reducing the quantity of stands to 800. What effect is going to this action have got on the market and an individual stand that is continue to operating? Pull graphs to illustrate your answer. c. Suppose that metropolis decides to charge a fee for the 800 licenses, all of which happen to be quickly sold. How will how big is the cost affect the range of pretzels marketed by someone stand? How can it affect the price of pretzels in the city? deb. The city really wants to raise all the revenue as is feasible, while making sure all 800 licenses can be purchased. How high should the town set the license fee? Show the solution on your graph.
Part N: Please solution three out of your five complications for Part 15, l. 340-343.
3. Assume the Clean Springs Normal water Company contains a monopoly about bottled water product sales in A bunch of states. If the price of tap water increases, precisely what is the change in Clean Springs' profit increasing levels of output, price, and profit? Explain in terms and using a graph.
4. A little town is usually served by many people competing supermarkets, which have regular marginal cost. a. Utilizing a diagram from the market intended for groceries, demonstrate consumer excess, producer surplus, and total surplus. w. Now guess that the independent supermarkets incorporate into one sequence. Using a fresh diagram, show the new consumer surplus, manufacturer surplus, and total surplus. Relative to the competitive marketplace, what is the transfer by consumers to producers? What is the deadweight loss?
5. The Placebo Medication Company holds a obvious on one of its discoveries. a. Assuming that the production with the drug entails rising little cost, attract a plan to demonstrate Placebo's income maximizing value and variety. Also present Placebo's income. b. Guess that the government imposes a duty on each jar of the medication produced. On a new picture, illustrate Placebo's new cost and amount. Compare diagram to answers in part (a)? c. Inside your diagram, the tax reduces Placebo's earnings. Explain how come this is true. deb. Instead of the tax per bottle, suppose that the government imposes a tax upon Placebo of $10, 1000 regardless of how various bottles happen to be produced. How exactly does this taxes affect Placebo's price, variety and revenue? Explain.
6. Lewis, Curly, and Moe run the only gargote in town. Lewis wants to sell as many beverages as possible without losing money. Curly wants the saloon to bring in as much revenue as possible. Moe wants to associated with largest conceivable profits. Utilizing a single picture of the saloon's demand shape and its expense curves, show the price and quantity blends favored by each of the three companions. Explain.
several. Many strategies for value...