# ch6a - Chapter 6 Perfectly Competitive Supply Wednesday...

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Chapter 6: Perfectly Competitive Supply Wednesday, June 30

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QUESTION 1 (quantity supplied, discrete) The table above gives my total cost schedule for supplying emeralds. If the market price of emeralds is \$500, how many should I supply? A) 1 B) 2 C) 3 D) 4 E) 5 emeralds TC 1 50 2 150 3 350 4 750 5 1550
answer to question 1 The table above gives my total cost schedule for supplying emeralds. If the market price of emeralds is \$500, how many should I supply? A) 1 B) 2 C) 3 D) 4 E) 5 I can produce four emeralds with marginal cost less than \$500, which is the price, A.K.A. the marginal revenue, A.K.A. my marginal benefit as a seller. emeralds TC MC P 1 50 500 2 150 100 3 350 200 4 750 400 5 1550 800

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QUESTION 2 (supply schedule, discrete) Which of the following gives my correct supply schedule for emeralds? emeralds TC 1 50 2 150 3 350 4 750 5 1550 P QS 0 - 1 0 1 - 2 1 2 - 3 2 3 - 4 3 4 - 5 4 > 5 5 P QS 0 - 50 0 50 - 150 1 150 - 350 2 350 - 750 3 750 - 1550 4 > 1550 5 P QS > 1550 0 750 - 1550 1 350 - 750 2 150 - 350 3 50 - 150 4 0 - 50 5 P QS 0 - 50 0 50 - 100 1 100 - 200 2 200 - 400 3 400 - 800 4 > 800 5 (A) (B) (C) (D)
answer to question 2 P QS 0 - 50 0 50 - 100 1 100 - 200 2 200 - 400 3 400 - 800 4 > 800 5 (D) emeralds TC MC 1 50 2 150 100 3 350 200 4 750 400 5 1550 800 0 600 1000 0 1 2 3 4 5 6 quantity supplied price

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QUESTION 3 (producer surplus, discrete) If the market price of emeralds is \$500, and I supply 4 emeralds, then how much producer surplus will I get? A) \$750 B) \$1550 C) \$4 D) \$2000 E) \$1250 emeralds TC 1 50 2 150 3 350 4 750 5 1550 Producer surplus is total revenue minus total (non- fixed) costs.
answer to question 3 If the market price of emeralds is \$500, and I supply 4 emeralds, then how much producer surplus will I get? A) \$750 B) \$1550 C) \$4 D) \$2000 E) \$1250 Q TC MC TR PS 1 50 50 500 450 2 150 100 1000 850 3 350 200 1500 1150 4 750 400 2000 1250 5 1550 800 2500 950

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QUESTION 4 (quantity supplied, continuous) Suppose that my marginal cost function for supplying homemade gravy is MC = 12 + 3Q , where MC is my marginal cost of supplying gravy (in dollar terms), and Q is the quantity of gravy that I produce, in gallons. If the going price of gravy is \$24 per gallon, then how many gallons of gravy should I supply? A) 1 B) 1.5 C) 2 D) 3 E) 4
A) 1 B) 1.5 C) 2 D) 3 E) 4 MC(Q) = 12 + 3Q MC(Q) = P 12 + 3Q = 24 3Q = 12 Q = 4 0 12 24 36 48 0 2 4 6 8 10 quantity supplied price

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QUESTION 5 (producer surplus, continuous) Suppose that my marginal cost function for supplying homemade gravy is MC = 12 + 3Q , where MC is my marginal cost of supplying gravy (in dollar terms), and Q is the quantity of gravy that I produce, in gallons. If the going price of gravy is \$24 per gallon, then I should supply 4 gallons of gravy. If I do so, what is my producer surplus? A) 10 B) 18 C) 20 D) 24 E) 36
answer to question 5 MC = 12 + 3Q P = \$24 Q * = 4 PS = .5 × 4 × 12 PS = 24 A) 10 B) 18 C) 20 D) 24 E) 36

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QUESTION 6 (supply curve, continuous) Again, my marginal cost function for supplying homemade gravy is MC = 12 + 3Q .
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ch6a - Chapter 6 Perfectly Competitive Supply Wednesday...

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