HW 8(section 15)

# HW 8(section 15) - the price is below \$8 and 4 meals if the...

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Experiment 8 Section 15 Problem 8.1 Part a. Number of restaurants opened: Session 1, Round 1 8 Session 1, Round 2 6 Part b), c), and d). Figure 8.4: Short-Run Supply and Demand-Session 1 Table 8.7: Competitive Equilibrium Predictions, Session 1 Mean Number of Restaurants' Price Meals Total Profit Short-Run Competitive Equilibrium in First Round \$8 32 -\$64.00 Short-Run Competitive Equilibrium in the Last Round 8 to 12 24 (-48) to 48 Long-Run Competitive Equilibrium 10 to 12 24 0 to 48 Table 8.8: Experimental Outcomes, Session 1 Mean Number of Restaurants' Price Meals Total Profits Session 1, First Round \$9.55 31 -\$18.97 Session 2, Last Round \$10.70 24 \$16.80 Problem 8.4 Part a) Number of Restaurants: Session 2, Round 1 6 Session 2, Round 2 5 Part b) With a \$3 sales tax, restaurants have a variable cost of \$8 per meal. \$0 \$5 \$10 \$15 \$20 \$25 \$30 0 5 10 15 20 25 30 35 40 45 50 55 60 65 Number of Meals PriceofMeals

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Each restaurant that is open will want to supply 0 meals if
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Unformatted text preview: the price is below \$8, and 4 meals if the price is greater than \$8. Part c), d), and e). Figure 8.5: Short-Run Supply and Demand-Session 2 Problem 8.5 Table 8.9 Competitive Equilibrium Predictions, Session 2 Mean Number of Restaurants' Price Meals Total Profits Short-Run Competitive Equilibrium in First Round 8 to 12 24 (-120) to (-24) Short-Run Competitive Equilibrium in Last Round \$12 20-\$20.00 Long-Run Competitive Equilibrium 13 to 18 16 0 to 80 Problem 8.5, Part b) Depends in which price in range Problem 8.6, Part a) Table 8.10: Experimental Outcomes, Session 2 Mean Number of Restaurants' Price Meals Total Profits Session 2, Round 1 \$10.90 24-\$50.50 Session 2, Round 2 \$12.21 20-\$15.86 Problem 8.6, Part b) Yes \$0 \$5 \$10 \$15 \$20 \$25 \$30 5 10 15 20 25 30 35 40 45 50 55 60 65 Number of Meals PriceofMeals...
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HW 8(section 15) - the price is below \$8 and 4 meals if the...

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