Result of the new regulation

Assignment Help Microeconomics
Reference no: EM132542225

Suppose Ralph and Ed have the only store that sells toilet bowls in northern Maine. Their nearest competitor is 211 miles away, and these two men have a reputation for producing high-quality toilet bowls. Graphically illustrate what the market for toilet bowls will look like for Ralph and Ed. Shade in the area of profit for Ralph and Ed and label the profit maximizing price (Pe) and quantity (Qe).

Then, suppose a new federal law is passed that forces all toilet bowl manufacturers to install devices that reduce the amount of water used per flush. Using a second graph, illustrate and explain what impact this new law will have on Ralph and Ed. Shade in the new area of profit for Ralph and Ed and label the profit maximizing price (P1) and quantity (Q1). Make sure to show the old profit maximizing price (Pe) and quantity (Qe) as well.

Explain how the market changed as a result of the new regulation.

Reference no: EM132542225

Questions Cloud

Sketch the price-consumption curve for the values : Suppose the price of good Y is $1 and the consumer has $100 to spend (M = 100). Sketch the price-consumption curve for the values
Explain the terms short-run break-even price : Explain the terms Short-Run Break-Even Price and Shut-Down Price.
Category of perfect competition : When you evaluate each industry, assess whether each industry fits into the category of perfect competition. explain in detail.
Calculate the slope and vertical intercept of a line : Discuss the steps necessary to calculate the slope and vertical intercept of a line.
Result of the new regulation : Suppose Ralph and Ed have the only store that sells toilet bowls in northern Maine. Their nearest competitor is 211 miles away, and these two men have a reputat
Draw a correctly-labeled graph for hermes : What would happen to the total revenue of Hermes if it decided to make one fewer car than Qm? Why?
Discuss the demand side of the market for oil : Discuss the demand side of the market for oil. What are the determinants of demand for oil? Justify your answer by quoting relevant sentences from the article.
Import a greater value of goods : Supposing that Canada and China were the only two countries in the world, why would it be impossible for Canada to import a greater value of goods
Understanding of the elasticity of demand : Governments often claim that they impose high taxes on cigarettes because smoking is bad for your health. They claim that the high taxes are intende

Reviews

Write a Review

Microeconomics Questions & Answers

  Theory of economic behaviour

Neoclassical economics was 'a crucial stage in the creation of a genuinely scientific unified theory of economic behaviour'. Discuss.

  What production decisions would you make

Based on this analysis, what production decisions would you make? Be sure to support your decisions with examples or data.

  Diversity and cultural competency

Diversity and cultural competency-what issues related to diversity and cultural competency are at play? Are such issues even being considered?

  Write the difference between scarcity and rarity do bill

what is the difference between scarcity and rarity? do bill gates and donald trump face scarcity and if yes how so?

  Mean or median prices in the area

Suppose you were buying another house. Would you be more interested in the mean or median prices in the area?

  Marginal benefits and marginal costs

Southwest Airlines is adding $100 million a year in new fees. Under new rules customers only get a partial refund for missed flights, prices are being raised for a third checked bag and for early boarding slots. The airline wants to increase rev..

  Discuss the quota on a specific imported product

When the government imposes a quota on a specific imported product, who benefits and who loses?

  Was president john kennedy more of a transactional leader

During his shortened presidency, was President John Kennedy more of a transactional or transformational leader? Use at least two examples (with proper cites) of his successes and/or failures to support your answer.

  Monopolistic competition and perfect competition

VWhich of the following is a characteristic of both monopolistic competition and perfect competition?

  Which region appears to have a comparative advantage

Which region appears to have a comparative advantage in producing cut flowers: Colombia or California? Explain. How have U.S. consumers of cut flowers.

  Marginal cost and benefit concept if current output is such

if current output is such that marginal cost exceeds marginal benefit should more or less resources be allocated to

  Show that relative to individual one

Suppose that there are two risk-averse individuals with the same utility function u = (w0.7/0.7), where w is wealth. Their initial wealth endowment.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd