ppslide_econ_week_3
... best they can. Suppose a firm has a fixed budget of $200 to spend on punch and cookies for its holiday party. • The price of punch is $2 per cup and the price of cookies is $1 per cookie; both goods will, of course, be provided free of charge to workers at the party. • The firm’s objective is to max ...
... best they can. Suppose a firm has a fixed budget of $200 to spend on punch and cookies for its holiday party. • The price of punch is $2 per cup and the price of cookies is $1 per cookie; both goods will, of course, be provided free of charge to workers at the party. • The firm’s objective is to max ...
Examples on Monopoly and Third Degree Price Discrimination
... Will the profit maximizing output change if the firm has a productive capacity greater than 40? The answer is obviously no. Without capacity constraints the firm, by producing QM , realizes profits higher than profits associated to any other output level. Since with a capacity constraint higher than ...
... Will the profit maximizing output change if the firm has a productive capacity greater than 40? The answer is obviously no. Without capacity constraints the firm, by producing QM , realizes profits higher than profits associated to any other output level. Since with a capacity constraint higher than ...
Question #3 Stephanie Price
... i) We have no way of knowing who likes candy more. What we do know: Chris would give up more money (or soft drinks) to get one more candy than Jody would. ii) Yes, because their marginal values are different. iii) Jody sells candy to Chris for soft drinks. Thus, Jody’s candy holdings decrease. Thus ...
... i) We have no way of knowing who likes candy more. What we do know: Chris would give up more money (or soft drinks) to get one more candy than Jody would. ii) Yes, because their marginal values are different. iii) Jody sells candy to Chris for soft drinks. Thus, Jody’s candy holdings decrease. Thus ...
Monopoly
... each facing a downward sloping demand curve will produce so that price exceeds marginal cost. Firms often product similar goods that have some differences thereby differentiating themselves from other firms ...
... each facing a downward sloping demand curve will produce so that price exceeds marginal cost. Firms often product similar goods that have some differences thereby differentiating themselves from other firms ...
Market Failure
... Allocative Efficiency con’t • If marginal cost of an extra unit is less than the marginal benefit derived from its consumption (10th unit), then it makes sense to increase production. • If marginal cost is more than the marginal satisfaction gained from consumption (30th unit), then it makes sense ...
... Allocative Efficiency con’t • If marginal cost of an extra unit is less than the marginal benefit derived from its consumption (10th unit), then it makes sense to increase production. • If marginal cost is more than the marginal satisfaction gained from consumption (30th unit), then it makes sense ...
Introduction and overview of ongoing research issues
... investment. The firms are indifferent in their decision to use more fixed or variable capital. Marginal cost pricing leads to allocative efficiency as welfare is maximized. The social marginal benefit of producing the last output unit equals its social marginal costs. Marginal cost pricing leads to ...
... investment. The firms are indifferent in their decision to use more fixed or variable capital. Marginal cost pricing leads to allocative efficiency as welfare is maximized. The social marginal benefit of producing the last output unit equals its social marginal costs. Marginal cost pricing leads to ...
Chapter 5
... affect supply of those goods Increase in wages in one country or the increased supply of a good in another will cause supply curve to shift Restrictions on imports also affect supply ...
... affect supply of those goods Increase in wages in one country or the increased supply of a good in another will cause supply curve to shift Restrictions on imports also affect supply ...
Chapter 5: Household Behavior and Consumer Choice
... utility for my $7. •I bought 3 slices of pizza which give a total utility of 56 and 2 scoops of ice cream which give a total utility of 44. My total utility from lunch is 56+44=100. There is no other combination of pizza and ice cream that give a greater utility for $7. ...
... utility for my $7. •I bought 3 slices of pizza which give a total utility of 56 and 2 scoops of ice cream which give a total utility of 44. My total utility from lunch is 56+44=100. There is no other combination of pizza and ice cream that give a greater utility for $7. ...
Sample
... (a) Average cost for this case is AC (10 q q2)/q 10/q 1 q. (b) Marginal cost for this case is the derivative of the total cost function, MC d(10 q q2)/dq 1 2q. (c) An effective index of scale economies is Sc AC/MC (10/q 1 q)/(1 2q). Scale economies exist when this rat ...
... (a) Average cost for this case is AC (10 q q2)/q 10/q 1 q. (b) Marginal cost for this case is the derivative of the total cost function, MC d(10 q q2)/dq 1 2q. (c) An effective index of scale economies is Sc AC/MC (10/q 1 q)/(1 2q). Scale economies exist when this rat ...
File
... (i) Correct labels: X axis Quantity and Y axis Rental, PR, Q, D and S PR and Q at intersection of D, S (ii) Supply curve is horizontal line at P Demand curve is MRPM Equilibrium QL is at intersection of MRPM and SM (b) Assume that the popularity of widgets declines, decreasing the demand or widgets ...
... (i) Correct labels: X axis Quantity and Y axis Rental, PR, Q, D and S PR and Q at intersection of D, S (ii) Supply curve is horizontal line at P Demand curve is MRPM Equilibrium QL is at intersection of MRPM and SM (b) Assume that the popularity of widgets declines, decreasing the demand or widgets ...
1 - Rose
... approximation to the real interest rate. For the United States in 1984, this approximation mean that the real interest rates was ___________ in 1984. When inflation is very high, subtracting the inflation rate from the nominal rate of return gives a poor approximation to the real interest rate. For ...
... approximation to the real interest rate. For the United States in 1984, this approximation mean that the real interest rates was ___________ in 1984. When inflation is very high, subtracting the inflation rate from the nominal rate of return gives a poor approximation to the real interest rate. For ...
PowerPoint Presentation - EXTERNALITIES
... because they reduce pollution at a lower cost to society. Using pigovian taxes to internalize externalities will cause market price to reflect the true social costs of production and force firms to bear the full social cost of their ...
... because they reduce pollution at a lower cost to society. Using pigovian taxes to internalize externalities will cause market price to reflect the true social costs of production and force firms to bear the full social cost of their ...
Handout #9
... Suppose that the monopolist can discriminate price in the way that if a consumer buys less than Q1 units, he has to pay P1 per unit. If he buys more than Q1 units, he has to pay P2 per unit. Then the monopolist can sell totally Q2 units. His revenue is [P1xQ1+P2x(Q2-Q10)]. In case that he can set on ...
... Suppose that the monopolist can discriminate price in the way that if a consumer buys less than Q1 units, he has to pay P1 per unit. If he buys more than Q1 units, he has to pay P2 per unit. Then the monopolist can sell totally Q2 units. His revenue is [P1xQ1+P2x(Q2-Q10)]. In case that he can set on ...
MIDTERM EXAMINATION III
... Suppose that Jasper’s utility function for Videos (V) and Movies (M) is given by U = V + M. Suppose that Jasper is currently in consumer equilibrium and consuming positive quantities of both V and M. It follows that a reduction in the price of videos will lead to ...
... Suppose that Jasper’s utility function for Videos (V) and Movies (M) is given by U = V + M. Suppose that Jasper is currently in consumer equilibrium and consuming positive quantities of both V and M. It follows that a reduction in the price of videos will lead to ...