Econ 310-1 Winter 2008 Last Problem Set with Answers

Econ 310-1 Winter 2008 Last Problem Set with Answers -...

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Economics 310-1 Last Problem Set! 1. Explain how it is that the two diagrams we gave in class both give producer surplus. 2. All firms in a competitive industry have LRTC curves given by C = Q 3 – 10Q 2 +50Q, where Q is the level of the firm’s output. What will be the industry’s LR equilibrium price? What will be the LR equilibrium output level of the firm? 3. Text 11.1 4. T sell 6 units rather than 5, a monopoly must lower price from $12 per unit to $11 per unit. What is MR here? Please use a diagram like Figure 11.3 to find area I and III in this example and explain what these areas represent. 5. A monopoly has a demand curve given by P = 200 – Q and TC = Q 2 + 40. Find the monopoly’s profit-maximizing quantity and price. How much economic profit does the monopoly earn? 6. Text 11.6 7. Text 11.11 8. A monopoly’s price is $20. At this price the absolute value of the elasticity of demand is 2. What is the monopoly’s MC? 9. What effect will the imposition of a 54% tax on economic profit have on a monopoly’s price and output decisions? 10.
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Econ 310-1 Winter 2008 Last Problem Set with Answers -...

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