# chap014 - Chapter 14 Answers to Questions and Problems 1 a...

This preview shows pages 1–3. Sign up to view the full content.

Chapter 14: Answers to Questions and Problems 1. a. 2,000. b. 2,800. c. Yes. Both the pre-merger HHI and change in HHI exceed those specified in the guidelines. 2. a. i. About \$125. ii. Approximately \$281.25 (computed as .5[7.5][\$200 - \$125] = \$281.25). b. i. \$80. ii. 12 units. iii. 0 units, since the firm would earn a loss by operating at the regulated price. 3. a. Set P = MC External + MC Internal to get 100 - 5Q = 30Q. Solving yields Q = 100/35 units. b. Set P = MC Internal to get 100 - 5Q = 20Q. Solving yields Q = 100/25 units. c. Set MR = MC Internal to get 100 - 10Q = 20Q. Solving yields Q = 100/30 units. d. Pollution taxes or permits. 4. a. 8 units. b. \$12 per unit. c. i. No. The socially efficient level would be 12 units. ii. Workers 1 and 2 get surplus of \$32, while worker 3 gets surplus of \$128. 5. a. Set MR = MC to get 25 – 2Q = 5. Solve to obtain Q = 10 and P = \$15. b. Set P = MC to get 25 – Q = 5. Solve to obtain Q = 20 and P = \$5. c. Monopoly profits, which are (\$15 - \$5)10 = \$100. 6. a. Note that Q S = Q SF + Q SD = 300 + 0.5P. Setting this equal to domestic demand yields 300 + 0.5P = 500 – 1.5P. Solving yields P = 100 and Q = 350 units. b. Setting total supply under the quota to total demand yields 150 + 0.5P = 500 – 1.5P. Solving yields P = \$175 and Q = 237.5 units. c. Worse off. d. Better off. Managerial Economics and Business Strategy, 7e Page 1

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

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

{[ snackBarMessage ]}

### Page1 / 3

chap014 - Chapter 14 Answers to Questions and Problems 1 a...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online