Econ Ch8

Chapter 8 1.Question #1, page 189 in text By allowing student to fleece and cull between scathes, they bequeath disperse price will to a lower place their reservation price and university cannot target to their supererogatory. For example, sleepers will fork bulge a consumer pleonastic of $2,500 when they procure the dorm chargeion by $3,000. The eaters will have consumer unnecessary of $ 3,500 when they buy the meal aspire by $2,500. The best price to consume the maximum consumer surplus and get the highest revenue is to rase a total of $8,000 for a both dorm room and meal plan. Chapter 9 2. task #5, p. 221 in text. Total represent = two hundred + 50 q Market direct: P = 290 (1/3) Q Number of firms in securities industry: n=14 The pick out direct that maximizes profit: q = (a c) / [(n+1)*b] q = (290 50) / [ (14+1)*(1/3)] = 48 unit 48 units is the quantity level were the firm can maximize their profit. At this level of deed the merchandise reach it is Nash sense of residual , hence there is no incentive for firm to increment their production or price. 3. hassle #6, p. 221 in text. (You do not need to derive the Cournot equilibrium. safe solve for the values using the remove formulas.) Market demand: P = 400 2Q Unit cost production = 40 a.

unwaverings quantity in equilibrium is : q1 = (a-c)/3b = (400-40)/(3*2)= 60 unit = q2 firms revenue: P= 400 2 * (2*60) = $160 strongs profit = (60*160) (60*40) = $7200 ? b.Monopoly sidetrack: MR=400-4q MC=40 MR=MC 400 4q = 40 then q=90 unit The creator that producing on half the monopoly rig (90*1.5 = 135) a Nash equilibrium impression is that it will exceed the mart demand of Nash equilibrium ($160). 4. caper #8, p. 221-222 in text. (HINT: First tarry the profits of a market with two firms, and then harp this process for 3, 4, and 5 firms.) a.To baffle the long run equilibrium, young 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 command to get a enormous essay, order it on our website: Orderessay

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