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    Chapter 8 Econ

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    deeznuts
    The document contains examples of managers facing different market structures making production and pricing decisions. It provides the optimal output level, pricing, and profits for firms in monopolistic, monopolistically competitive, perfectly competitive, and monopoly market structures given specific cost and demand conditions. The document tests understanding of key economic concepts related to firm behavior under different market structures.

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    Chapter 8 Econ

    Uploaded by

    deeznuts
    88 views2 pages
    The document contains examples of managers facing different market structures making production and pricing decisions. It provides the optimal output level, pricing, and profits for firms in monopolistic, monopolistically competitive, perfectly competitive, and monopoly market structures given specific cost and demand conditions. The document tests understanding of key economic concepts related to firm behavior under different market structures.

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    Chapter-8-Econ

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    The document contains examples of managers facing different market structures making production and pricing decisions. It provides the optimal output level, pricing, and profits for firms in monopolistic, monopolistically competitive, perfectly competitive, and monopoly market structures given specific cost and demand conditions. The document tests understanding of key economic concepts related to firm behavior under different market structures.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    88 views2 pages

    Chapter 8 Econ

    Uploaded by

    deeznuts
    The document contains examples of managers facing different market structures making production and pricing decisions. It provides the optimal output level, pricing, and profits for firms in monopolistic, monopolistically competitive, perfectly competitive, and monopoly market structures given specific cost and demand conditions. The document tests understanding of key economic concepts related to firm behavior under different market structures.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    2. You are the manager of a firm that sells its product in a competitive market at a price of $60.

    Your firm’s cost function is C=60 + 2Q^2. Your firm’s maximum profits are: $390

    3. You are a manager in a perfectly competitive market. The price in your market is $35. Your
    total cost curve is C(Q) = 20 + 5Q + .5Q2. What level of output should you produce in the short
    run? 33

    4. You are the manager of a firm that has an exclusive license to produce your product. The
    inverse market demand curve is P = 1800 - 1.5Q. Your cost function is C(Q)=2Q+Q2.

    Determine the output you should produce, the price you should charge, and your profits.

    $92,303.60

    5. Beta Industries manufactures floppy disks that consumers perceive as identical to those
    produced by numerous other manufacturers. Recently, Beta hired an econometrician to
    estimate its cost function for producing boxes of one dozen floppy disks. The estimated cost
    function is C = 10 + Q2. Now suppose other firms in the market sell the product at a price of $5.
    How much should this firm charge for the product? $5

    6. Which of the following market structures would you expect to yield the greatest product
    variety? Monopolistic Competition.

    7. You are a monopolist with the following cost and demand conditions: P=100-2Q and
    C(Q)=50+Q^2. Determine the profit -maximizing output and price.

    Q=16 2/3; P=$66 2/3

    8. You are a manager in a perfectly competitive market. The price in your market is $35. Your
    total cost curve is C(Q) = 20 + 5Q + .5Q2. What price should you charge in the short run? 35

    9. A perfectly competitive firm faces a: perfectly elastic demand function

    10. Price in competition market is 6. The firms marginal cost is 4 and the marginal cost curve
    has the normal shape. What would you advise the firm to do? Increase its output

    11. A monopsony is a market with one buyer

    13. For a monopolist to earn an economic profit in the long run, which of the following must
    happen? There are barriers to entry

    14. A firm can produce two products with the cost function C(Q1, Q2) = 10 + 5Q1 + 5Q2 -
    0.2Q1Q2. The firm enjoys: cost complementary
    15. Differentiated goods are NOT a feature of a: perfectly competitive market and monopolistic
    market

    16. Advertising adds cost to producing a good. Therefore, it increases the average total cost of
    production

    17. In a market there are many firms selling differentiated products. The product is: a
    monopolistically competitive market

    18. A profit-maximizing monopolist will: produce an output level at which P>MC

    19. Economies of scale exist whenever: average total costs decline as output increases

    20. If a firm is producing at an output level at which: price exceeds average total costs then the
    firm is earning an economic profit

    21. Which of the following formulas correctly measures the profit of a monopoly?

    π= TR - TC andπ = (P - ATC)Q

    22. You are a monopolist with the following cost and demand conditions: P = 100 - 2Q and C(Q)
    = 50 + Q2. Determine the actual amount of deadweight loss. $138.86

    23. Which of the following are examples of price discrimination?

    iii peak and off-peak train fares

    iv a doctor charging wealthier higher consultancy fees

    24. In a competitive market, which of the following is the firms supply curve? The marginal cost
    curve

    25. You are a manager in a perfectly competitive market. The price in your market is $35. Your
    total cost curve is C(Q) = 20 + 5Q + .5Q2. Will you make any profits in the short run? $534.50

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