QUESTION 2 Glyde Air Fresheners is the dominant firm in the solid room aromatizer industry, which has a total market demand given by Q = 80 - 2 P. Glyde has competition from a fringe of four small firms that produce where their individual marginal costs equal the market price. The fringe firms each have total costs given by TC; = 10 Q₁ + 2 Q2₁. If Glyde's total costs are given by TCG = 100 + 6 QG, what are the total profits of the fringe firms? O $32. O $64. $96. $128. $160.
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- A firm in a perfectly competitive industry has patented a newprocess for making widgets. The new process lowers the firm’saverage cost, meaning that this firm alone (although still aprice taker) can earn real economic profits in the long run. a. If the market price is $20 per widget and the firm’s marginalcost is given by MC=0.4q , where q is the dailywidget production for the firm, how many widgets willthe firm produce? b. Suppose a government study has found that the firm’snew process is polluting the air and estimates the socialmarginal cost of widget production by this firm to be. If the market price is still $20, what is thesocially optimal level of production for the firm? Whatshould be the rate of a government-imposed excise tax tobring about this optimal level of production? c. Graph your results.a student - run latte stand at the center of campus serves two types of customers students and professors there are 500 students and 30 professors at the college. each student's reservation price for a latte is $2 wach professor's reservation price for a latte is $5 each individual buys one latte per day . the latte stand marginal cost of producing a latte is constant at $1 suppose the latte stand can't prce-discriminate . if it chnages $2 per latte the consumer surpus will be per and the producer surpus will per day. suppose now that the latte stand can price discriminate if it changes students who must show their student ids $2 and professors $5 the consumer surpus will be per day and the producer surpulus will be per day A.0;530;90;530 b.0;0;0;620 c.90;0;0;90;530 d. 90;530;30;620If a market has few barriers to entry and manyfirms, how might firms still have positive economic profit? Describe a strategy a firm in thistype of market might use to maintain economicprofits
- Suppose that the industry demand curve is given by the following quantity demanded = 100 – 0.5 output. In equilibrium, the market price is equal to 6 pesos per unit. q TR MR TFC TVC TC AC AVC AFC MC Profits 0 10 1 5 2 3 3 2 4 1 5 2 6 3 7 4 8 5 9 6 10 7 11 8 Draw the average cost, average variable cost, marginal cost and marginal revenue curves. Clearly indicate the profit maximizing level of output as well as the areas corresponding to total cost, total…Below we the market demand for a good, and the total cost of producing various levels of quantities by the industry. This problem is a theoretical example of Cournot Competition, where firms choose quantities to produce, and end up selling at whatever price the market is willing to pay for the total industry output. For simplification purposes, firms have no fixed costs, and a constant MC and ATC.a. Complete the table. Quantity Price TR MR TC MC ATC Profit 0 $14 — 0 — — 10 $11 10 20 $8 20 30 $5 30 40 $2 40Glyde Air Fresheners is the dominant firm in the solid room aromatizer industry, which has a total market demand given by Q = 80 - 2P. Glyde has competition from a fringe of four small firms that produce where their individual marginal cost equals the market price. The fringe firms each have a total cost given by: TCi = 10Qi + 2Qi2. If Glyde’s total costs are given by TCG = 100 + 6QG a) what price should Glyde establish for air fresheners? b) what is Glyde’s maximum profit?
- Glyde Air Fresheners is the dominant firm in the solid room aromatizer industry, which has a total market demand given by Q = 80 - 2P. Glyde has competition from a fringe of four small firms that produce where their individual marginal costs equal the market price. The fringe firms each have total costs given by TC; = 10Q; + 2Q²;. If Glyde's total costs are given by TCG = 100 + 6QG, what are the total profits of the fringe firms?Figure 14-10 In the figure below, panel (a) depicts the linear marginal cost of a firm in a competitive market, and panel (b) depicts the linear market supply curve for a market with a fixed number of identical firm Pr (A) Firm d) Market 14.00 €€ 12:00 $3.00 300 600 Deantry 01 02 Drenty Refer to Figure 14-10. If there are 500 identical firms in this market, what is the value of Q2? O a. 12,000 Ob. 60,000 Oc. 240,000 d. 300,000Return to Figure 9.2. Suppose P0 is $10 and P1 is$11. Suppose a new firm with the same LRAC curve asthe incumbent tries to break into the market by selling4,000 units of output. Estimate from the graph what thenew firm’s average cost of producing output would be.If the incumbent continues to produce 6,000 units, howmuch output would the two firms supply to the market?Estimate what would happen to the market price as aresult of the supply of both the incumbent firm andthe new entrant. Approximately how much profit wouldeach firm earn?
- A computer hardware firm sells both laptop computers and printers. Through the magic oft focus groups, their pricing team determines that they have an equal number of three types of customers, and that these customers' reservation prices are as illustrated in the figure below. Laptop Printer Bundle Customer A Customer B Customer C $750 $1,000 $100 $150 $850 $1,150 $650 Se00 S50 Assume for simplicity the marginal cost of production for laptops and printers is zero. in total? If the firm were to charge only individual prices (not use the bundle price), what prices should it set for its laptops and printers to maximize profil? Assuming for simplicity that the firm has only one customers of each type, how much does it earm To maximize profit using individual prices, the firm should charge a price for laptops of p=0 and a price for printers of (Enter your responses as whole numbers.) In tum, profit isx=$. (Enter your response as a whole number.) After conducting a costly study, an outside…WEBCAM RECORDING Industrial Economics da 6 A market is characterised by an inverse demand curve p =8 – 2Q where Q is total quantity. Two firms, A and B, are competing à la Cournot and TCA(qA) = 29A and TCB(qB) = q ta non %3D data Total profits n (1.e. the sum of profit for the two firms) are equal to: ggio max. ontrassegna O (a)n = nda %3D O (b) = 16 O (c)N = 4 O (d) = 9 Precedente SuccessivoCynthia, the top student in her economics class, has realized that there is a business opportunity in tutoring her fellow students before each economics exam. Assuming her knowledge of economics eliminates any risk of competition and that her marginal cost is constant for the relevant output range, specify Cynthia's profit-maximizing price and quantity of tutoring hours she should provide. Instructions: In the graph below, use the demand curve provided to draw the correct marginal revenue curve 'MR. Identify the profit-maximizing price and quantity using the point tool 'A', and shade the area of economic surplus lost due to her selling at this price using the toll labelled "loss! Price ($/hour) 10- 5 10 The Tutoring Market for a monopolist 15 20 25 30 35 40 45 Quantity (hours) reset MC D MR 7 A Loss The efficient quantity is 225 hours. Dead Weight Loss caused by restricting quanity as indicated in the graph is $11.75 The amount of consumer surplus with a profit-maximizing monopolist is…