Question

12. A price-searcher firm wants to try a two-part tariff. The
firm's marginal cost is a constant **$3** and it will
charge that as the per unit price. To complicate things, the firm
has two different groups of consumers. There are
**50** consumers who have a demand function given by:
**q _{D}=18-0.5**P. There are also

If the firm charges a fee that is too high, then it may lose all of the customers of the low-willingness-to-pay group. That could be bad for their producer surplus, but it might also be worth it depending on the number of consumers lost and the size of the higher fee.

Determine whether the producer surplus for the firm is greater when it charges a higher fee and has fewer customers or charge the lower fee and have more customers. Then enter the dollar amount of producer surplus.

*(Do not include a $ sign in your response. Round to the
nearest two decimal places if necessary.)*

Answer #1

A price-searcher firm wants to try a two-part tariff. The firm's
marginal cost is a constant $7 and it will charge
that as the per unit price. To complicate things, the firm has two
different groups of consumers. There are 30
consumers who have a demand function given by:
qD=15.25-0.25P. There are also
40 consumers who have a demand function given by:
qD=30.5-0.5P
If the firm charges a fee that is too high, then it may lose all
of the...

3. Suppose that a price-searcher monopolist had a total cost
function given by: TC= 20 + 2Q +0.25Q2.
The demand for the price searcher's product is given by:
QD= 100 -5P.
Calculate the price the monopolist will charge.
(Do not include a dollar sign in your response. Round to the
nearest two decimals.)
4. Suppose that a price-searcher monopolist had a total cost
function given by: TC= 20 + 2Q +0.25Q2.
The demand for the price searcher's product is given...

Consider a closed economy. Suppose the market for corn in banana
republic is competitive. The domestic market demand function for
corn is Qd=18 -P and the domestic market supply function is Qs=P-2,
both measured in billions of bushels per year. In order to help the
corn industry, the government initiated a price support program by
purchasing 2 billion bushels corn in the market.
a) draw a graph to show the new market equilibrium
price and quantity without calculating the number....

Using Supply and Demand to Analyze Markets — End of
Chapter Problem
The Ministry of Tourism in the Republic of Palau estimates
demand and supply for its scuba diving tours is given by
??=6,000−20?, where ?Q is the number of divers served each month
and P is the price of a two-tank dive. The supply of scuba diving
tours is given by ??=30?−2,000QS=30. The equilbrium price is $160,
and the equilibrium quantity is 2,800 customers diving each year.
The Ministry...

Consider a monopolist facing two types of consumers. Normalise
the total population to 1. Type one consumers are in proportion
1/2, and type two are in proportion 1/2. The monopolist has
marginal cost of production c = 1/2. The two types have demand
curves
q₁ =1-p
q₂ =1-(p/2).
If the monopolist can identify the two types and can charge
different two-part tariffs to different types: {A1, p1} and {A2,
p2}. [All type one consumers are identical and have the q1...

Consider a publicly available technology of producing a good
that is characterized by the variable cost function VC (Q) =
(1/2)Q2 and fixed costs FC = 2 for a firm that operates
the technology. In the short run, fixed costs are unavoidable. In
the long run, fixed costs are avoidable and it is free for any firm
outside of the market to enter, should it want to. In the short
run, the set of firms in the market is fixed....

2. Suppose that there is a firm that sells the same good in two
different markets and that it is able to prevent resale from the
lower priced market to the higher priced market. The direct demand
functions for the two markets are given by the following two
equations:
Q1 = 8- P1 Q2= 12- P2
Also, the firm produces this good in one plant, so the Total
Cost function is given by the following equation:
TC = 5 +...

I only want the answer of problem 2
1.There is only one least-cost way to make wooden boxes for
shipping tomatoes, and any firm that makes
them has a cost function given by C = 200 + q +.005q2. The
inverse market demand for boxes is given by
p = 10?.005Q. There is currently only one firm in the industry
and it is able to act as a monopolist.
(a) What is its output and what price does it charge...

Which of the following statements is true?
a
A market failure occurs when the market
produces the “wrong” amount of a good or service, or fails to
provide any at all.
b
When there is market failure, resources are either
over-allocated or under-allocated to the production of the
good.
c
Supply-side market failures occur when it is
impossible to charge all consumers, or even any consumer of the
good, the price for the good. As a result, firms are not...

(c) The aggregate marginal cost function for this two-firm
industry is: MC = 3Q Suppose the marginal benefit of pollution
control is given by: MB = 35 − 0.5Q What is the efficient level of
abatement?
(d) What is the relationship between cost-effectiveness and
efficiency? (e) What pollution tax would yield the efficient level
of abatement you found in part (c)? If the pollution charge is
levied on all units of emissions, how much revenue would the
government receive?
(f)...

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