2nd half multiple choice explanations

# 2nd half multiple choice explanations - Multiple choice...

This preview shows pages 1–2. Sign up to view the full content.

This preview has intentionally blurred sections. Sign up to view the full version.

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

Unformatted text preview: Multiple choice explanations: Assignment 4 1. by de&nition 2. each &rm supplies according to Q = 2 + 3 P: Given that there are 5 &rms, the total supply at any price is 5 & Q; giving Q S = 10 + 15 P 3. by de&nition 4. by de&nition 5. by de&nition 6. standard result. Recall the approximate share of a tax paid by consumers: E s E s + j E d j 7. A price ¡oor sets the price above the market-clearing price. That means that some dairy farmers are unable to sell their milk, making them worse o/ 8. (see 7) 9. by de&nition 10. by de&nition 11. by de&nition 12. by de&nition 13. For complementary goods, an increase in the price of one decreases the demand for other, lowering the equilibrium price there. Thus, the relationship is downward-sloping 14. by de&nition 15. by de&nition Assignment 5 1. Pro&t-maximizing level of output: MR ( Q ) = MC ( Q ) 2. P & MC P = 1 j E d j : Substituting in values and rearranging gives P = 3 1 3 3. as discussed 4. as discussed 5. by de&nition 6. by de&nition 7. and 8. When a &rm achieves perfect price discrimination, it extracts all consumer surplus. as a result, it wants to maximize overall surplus and thus deadweight loss is eliminated 9. A &rm has market power when it faces a downward-sloping demand9....
View Full Document

{[ snackBarMessage ]}

### Page1 / 3

2nd half multiple choice explanations - Multiple choice...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online