Key_to_Mid-Term_Exam_Study_Guide_Questions

Key_to_Mid-Term_Exam_Study_Guide_Questions - Key to...

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Key to Mid-Term Exam Study Guide Questions 1. a) MC = 5 + 0.001Q b) P = $35 c) Q = 5,000 d) π = $37,500 2. a) Q = 700 b) P = $830 c) π = $209,000 3. a) Q = 8,000 b) π = $50,000 4. a) Q 1 = 13,000 Q 2 = 3,000 Since the company wants to provide as much patient care as possible, the optimal quantity is 13,000. 5. a) Q = 1,000 MC = $1,700 AC = $1,700 P = $2,500 π = $800,000 6. a) Q = 2,000 P = $4,300 π = $1,600,000 7. a) Q =520,000 P = $65 TR = $33,800,000 8. a) Q = 50,000 – 5,000P P = 10 -0.0002Q b) Q = 25,000 c) ε P = -4
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d) Since the absolute value of the elasticity (=-4) is more than 1, a price reduction would increase the total revenue. 9. a) Q = -20,000,000 + 400,000P b) Q = 0 c) P = $75 10. a) MC = $75 b) Q = 1,000,000 11. a) Q D = 40,000,000 – 1,200,000P Q S = -5,000,000 + 2,400,000P b) Q D = 34,000,000 Q S = 7,000,000 Shortage, because Q D > Q S . Shortage = Q D - Q S = 34,000,000 – 7,000,000 = 27,000,000 c) P = $12.50 d) P = $20.83 12. P $25 A $5 B C Demand 0 Q 4 Consumer Surplus = ABC = ½(Base)(Altitude) = ½(4)($25 - $5) = $40
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This note was uploaded on 05/09/2011 for the course ECON 528 taught by Professor Adhikari during the Spring '11 term at University of Louisiana at Lafayette.

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Key_to_Mid-Term_Exam_Study_Guide_Questions - Key to...

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