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A firm has the cost function: TC = Q² It sells its goods in two markets with different demands:QA = 330 - 2PA & QB = 510 - 4PB
a) If the firm can practice third-degree price discrimination, how much will the firm produce? What will be the optimal price and quantity in each market?
b) Under first-degree price discrimination, how does the relationship between demand and marginal revenue change? What happens to output and profits, to social, consumer and producer surpluses and deadweight loss? (No calculations required.)
c) What are the conditions for Pareto efficiency? Are they met in the two cases above, if the only other industry in this economy, and all factor markets, are perfectly competitive?
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Consider a firm that produces military equipment. It employs 2,000 workers and pays each of them a competitive wage of $40,000 per year; its total labor costs are therefore $80 million per year. The firm also has other, non-labor costs of $30 million..
junstin.Ting Corporation wants to establish a scholarship in the company's name at a university. The firm wants the scholarship to provide a quarterly award of $4500. The university's scholarship foundation will invest the endowment in a fund that..
There are 168 hours in a week. Of these, about 60 hours will go to sleeping (more or less). That leaves 108 hours for which we have a choice in terms of how we will spend that time. Let's assume that we will spend the 108 hours in either work or l..
Mapleville Tennis & Golf Club offers golf and tennis memberships to the residents of Mapleville. Market research has found there are two types of families living in the city: 120 golf-oriented families and 100 tennis-oriented families. Information..
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