Firm with market power has the inverse demand curve

Assignment Help Business Economics

Reference no: EM13996800

A firm with market power has the inverse demand curve P = 90 – 1.5Q and the marginal cost curve MC = 10 + Q. If the firm decides to practice perfect price discrimination, its producer surplus will: increase from $400 to $840.

increase from $800 to $1,280

decrease from $1,600 to $880

decrease from $750 to $550.

Reference no: EM13996800

Questions Cloud

Brazils coffee-growing region will lower the price of coffee : A freeze in Brazil's coffee-growing region will lower the price of coffee. "Protecting" American textile manufacturers from Chinese clothing imports will lower clothing prices in the United States. The rapid increase in college tuitions will lower th..

Market mechanism rations scarce goods and services : When a good is limited, some means must be found to ration the scarce commodity. Some examples of rationing devices are auctions, ration coupons, and first-come first- served systems. What are the strengths and weaknesses of each? Explain carefully i..

Mechanism to determine how output is to be distributed : Scarcity forces society to come up with a mechanism to determine how output is to be distributed. If society decided not to use price as an allocative mechanism (price determines who receives goods and services), then what would you suggest as an alt..

What determines the composition of national output : What determines the composition of national output? In some cases, we say that there is "consumer sovereignty." meaning that consumers decide how to spend their incomes on the basis of their tastes and market prices. In other cases, decisions are mad..

Firm with market power has the inverse demand curve : A firm with market power has the inverse demand curve P = 90 – 1.5Q and the marginal cost curve MC = 10 + Q. If the firm decides to practice perfect price discrimination, its producer surplus will: increase from $400 to $840.

Provide the essential positive economic analysis : The great English economist Alfred Marshall (1842-1924) invented many of the tools of modern economics, but he was most concerned with the application of these tools to the problems of society. Explain how the cool head might provide the essential po..

Assume imports increase supply-supply and consumer surplus : Assume that imports increase supply. In terms of demand, supply and consumer surplus, why would consumers prefer more imports? Adam Smith studied a pin factory and found that 1 individual doing all tasks necessary to make a pin could only make severa..

Discuss the benefits and drawbacks of advertising : What recent advertising have you found to be particularly interesting - something that made you want to learn more about a product/service or you wanted to buy? Did you buy? What was it about the method of delivery, ad, etc. that attracted your inter..

The total revenue functions for the firm : Q=55-0.5PGiven the firm’s demand function Q=55-0.5P (where P = price and Q = rate of output), and the total cost function TC=20+Q+0.2Q^2 where TC = total cost, determine a. The total revenue functions for the firm.

User Account

All Pages