Market demand curve, Macroeconomics

Assignment Help:

The entire market is capture by a single firm which can produce at a constant average and marginal cost of AC = MC = 10. The firm faces a market demand curve given by Q = 60 ? P.

(a) Calculate the profit-maximizing price and quantity combination for the firm. What is the firm's profit?

(b) Suppose that the market demand curve shifts outward and be- comes steeper. Market demand is now described as Q = 45?0.5P .

(c) What is the firm's profit-maximizing price and quantity combination now? What is the firm's profit?

(d) Instead of the demand function assumed in part b, assume instead that the market demand shift outward and becomes flatter. It
is described by Q = 100 ? 2P . Now what is the firm's profit- maximizing price and quantity combination? What is the firm's profit?

(e) Graph the three different situations in parts (a.), (b.), and (c.). Based on what you observe, explain why there is no supply curve for a firm with monopoly power.


Related Discussions:- Market demand curve

Evaluation of money, Ask question #Minimum 1 page words accepted#

Ask question #Minimum 1 page words accepted#

Pareto optimality, Diagramatic explanation of pareto optimality

Diagramatic explanation of pareto optimality

What are forms of price floors to lead inefficiency, What are forms of pric...

What are forms of price floors to lead inefficiency? Price floors frequently lead to ineffectiveness in the forms of: a. Inefficient allocation of sales in between sellers

Block exogeneity test, From Tables 3A to 3F in the Appendix the results fro...

From Tables 3A to 3F in the Appendix the results from VAR/Block Exogeneity Granger Causality Test are that the oil price variable does Granger cause both Inflation and interest rat

Why gdp is determined only by aggregate demand, Q. Why GDP is determined on...

Q. Why GDP is determined only by aggregate demand? Note that we haven't said anything about the aggregate supply so far. In order to justify why GDP is determined only by aggre

Determine the degrees of freedom, A biologist working in the Outback of Aus...

A biologist working in the Outback of Australia is studying the effects of land-use by tourists (campers, fishers, etc.) on vegetation cover in a river gorge of the outback. There

Average price-earnings ratio, In a survey of 120 publicly-traded companies,...

In a survey of 120 publicly-traded companies, the average price-earnings ratio was 18.5 with a standard deviation of 8.2. When testing the hypothesis (at the 5% level of significan

Liberalisation of capital account and convertibility issue, Liberalisation ...

Liberalisation of Capital Account and Convertibility Issue: Broadly speaking and irrespective of sector specificity, a liberalised system is one where the role of the governme

Net Exports and the price level, Ok... So if the price level is rising, th...

Ok... So if the price level is rising, this means that inflation is rising as well, so the value of the dollar in the US would decrease meaning that purchasing power decreases as

Write Your Message!

Captcha
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