Equation Questions

# Equation Questions - -minAVC-minATC-MC ATC and AVC of...

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1. In the market for beer, Qd = 100 – P Qs = 3P where Q is quantity of cases; P is price in dollars The government decides to levy a tax on suppliers. The new, after-tax market supply is given by Qs = 3P – 8 What do consumers pay with the tax in effect? What do suppliers receive? What is the amount of the tax? How is the burden of the tax split between consumers and suppliers? What is the government’s tax revenue? What is the deadweight loss due to taxation? 2. J&H Industries produces breadboards for restaurants. The only variable input is labour. Costs and the selling price of the good, P, are given in dollars. Fill in the rest of the table. L Q MP TFC TVC TC MC AFC AVC ATC P 1 20 5 60 15 2 40 15 3 50 15 4 58 15 5 62 15 6 64 15 Sketch the typical short run cost curves. Label the following on the diagram:

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Unformatted text preview: -minAVC -minATC -MC, ATC and AVC of producing 50 breadboards 3. Market demand and market supply for concrete blocks (a perfectly competitive industry) are : Qd = 150 2P Qs = 3P. Price = price per block Q = number of blocks in thousands. All the firms in the industry are identical. A firms MC = 5 + 5Q and ATC = Q 2 . What is the firms profit-maximizing level of output? What is the firms profit? How many firms are there in the industry? Is the industry in LR equilibrium? 4. A monopoly faces market demand P = 120 -2.5Q. Its MR = 120 5Q MC = Q ATC = 10 + Q What is the monopolys profit maximizing level of output? Selling price? Profit? If this were a perfectly competitive market, what would be price and output level? What is the monopolys producer surplus?...
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