{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

section4_15Oct08_Exam

# What will happen to the equilibrium retail price

This preview shows page 1. Sign up to view the full content.

This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: minimu m p rice of 15 instead of 10. What will happen to the equilibrium retail price, demand, and total revenue if retailers hav e to pay 15? 4. Assume AD = 50 and FP = 10, as in question 1. The American Medical Association just came out with a repo rt clai ming sweet onions reduces t he chan ces of getting colon cancer. A consumer survey you have conducted indicates that, regardless of price, consumers will increase their consumption of s weet onions by 5% because o f this report . If the 5 % increase in demand is correct for 2006, wh at will the retail price and s ales be for 2006? (Hint: the ans wer to this question shoul d be determined by shifting the demand curve). Question 2 The New York State Electric and Gas (NYSEG) Co mpany, which serves Upstate New York is for all practical pu rposes a monopoly. Assume that the market demand, marginal revenue, and total costs faced by NYSEG is: P = 300 – 2 Q (demand) MR = 300 – 4 Q (marginal revenue) TC = 100 Q (total cost) AEM 4150 review section 15 Octob er, 2008 where P is the price of electricity, Q is total quantity of electricity, MR is marginal revenue, and TC is total cost of supplying electricity. 1. Assuming NYSEG acts as a monopolist, calculate the opti...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online