Reference no: EM13734301
Suppose that the market demand for organs is Q = 800-3P, where Q = QF + QD and Q is the total quantity, QF is the quantity supplied by fringe firms and QD is the quantity supply by the dominant firms. The dominant firm’s total costs are given by CD = 80QD and the competitive fringe's supply curve is given by QF = ?200 + 2P.
a. Graph the market demand curve and the fringe firm’s supply curve. Label the vertical intercepts of each.
b. Find the dominant firm’s marginal and average costs. Show these costs on the diagram.
c. Find the price at which the fringe firms will supply the entire quantity demanded by the market. Label this price P1.
d. Find the price at which the fringe firms will choose to drop out of the market (supply no output). Label this price P2.
e. Find the dominant firm’s residual demand curve for prices between P1 and P2. Add this residual demand curve to the diagram.
f. Find the dominant firm’s profit-maximizing quantity of output.
g. Find the price level the dominant firm would set.
h. Find the profits of the dominant firm.
|
Difference between normative and positive economics
: Explain the difference between normative and positive economics. Determine which of these statements are normative and which are positive and explain why you place them in the normative or positive category.
|
|
Significantly lower financial savings for all individuals
: As a general rule, is it safe to assume that a lower interest rate will encourage significantly lower financial savings for all individuals? Explain.
|
|
What is the annualized cost of this project
: The Rustin Transportation Planning Board estimates the cost of upgrading a 4-mile section of 4-lane highway from public use to toll road to be $41 million now. Resurfacing and other maintenance will cost $820,000 every 4 years. A toll road would requ..
|
|
Rather than on the quantity demanded of other goods
: As a general rule, is it safe to assume that a change in the price of a good will always have its most significant impact on the quantity demanded of that good, rather than on the quantity demanded of other goods? Explain.
|
|
Find the profits of the dominant firm
: Suppose that the market demand for organs is Q = 800-3P, where Q = QF + QD and Q is the total quantity, QF is the quantity supplied by fringe firms and QD is the quantity supply by the dominant firms. Find the profits of the dominant firm. Find the p..
|
|
A new and better fertilizer is developed
: Construct a PPF for a country that produces food and video games and faces increasing opportunity costs. Show how the PPF changes given the following events.
|
|
Change in demand or a change in quantity demanded
: State whether the following will result in a change in demand or a change in quantity demanded. Explain.
|
|
Explain difference between normative and positive economics
: Explain the difference between normative and positive economics. Determine which of these statements are normative and which are positive and explain why you place them in the normative or positive category.
|
|
Making predictions about market outcomes
: According to the World Bank’s Mind, Society, and Behavior, which two economists are associated with the removal of psychological factors from economics generally and from “making predictions about market outcomes” in particular?
|