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B the owners of tk decided they wanted to support the

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(b) The owners of TK decided they wanted to support the reading of Slovenian books.How many copies of the novel TK would sell if they wanted to make the marketefficient? Please identify the quantity in the diagram drawn for part a) [2 marks]
(c) One of the employees at TK proposed a third solution: setting a price such thatrevenue is maximised. Which was the price he proposed? [1 marks]
(d) After a few years some of the conditions on the market changed. Demand
that TK acted again as a monopolist. Moreover, the Italian government imposed a2,000 lump sum tax on all bookshops. Calculate TK’s new price and profits under thenew conditions. [3 marks]a
QuestionB2The industry for mopeds has a market demand curve given by the equation P = 50 – Q/10,where P is the market price, and Q is industry-wide output. Ten (10) perfectly competitivefirms currently operate in the moped industry. Each of these firms has a total cost functiongiven by TC = 25 + 20q + q2, where q is the output of the individual firm.Note, to get full marks for this question you must draw diagrams indicating theoutcomes in the answers.(a) When would existing firms in the moped industry shut down in the short run? (2 marks)

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Term
One
Professor
NoProfessor
Tags
Supply And Demand, producer, DWL

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