yvonne_710
Don't Lie
hey~everyone, i got some economics problems here... in the attachment is about our exam 2 questions from stream 4, eps short answers! our lecturer didnt give us the full details, can someone explain? thanks...
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ECON1001 Problems (1 Viewer)
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Rorix
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a) marginal cost pricing
b) to maximise revenue, the firm should produce where P=MC on the upward slope of the MC curve (obviously), however, at this point P<AVC so the firm produces nothing to minimise loss
c) Firms minimise cost i.e. produce as close to minimum ATC as possible, therefore q=5, P=7 as ATC = 7
d) not sure
b) to maximise revenue, the firm should produce where P=MC on the upward slope of the MC curve (obviously), however, at this point P<AVC so the firm produces nothing to minimise loss
c) Firms minimise cost i.e. produce as close to minimum ATC as possible, therefore q=5, P=7 as ATC = 7
d) not sure
yvonne_710
Don't Lie
the short answers part...errrrrrrrRorix said:
yvonne_710
Don't Lie
it is not that easy, at least our av for this part was 2.8 out of 10, i think,so lowkow_dude said:
yvonne_710
Don't Lie
well, i am in stream 4, of course i got it from my lecturer.........kow_dude said:
ToO LaZy ^*
n/a
just a quick question dudes and dudettes..
what's the efficient output in a monopoly.?
what's the efficient output in a monopoly.?
yvonne_710
Don't Lie
Sarah, it seems that u r really good at ECON1001...Sarah168 said:monopolies are a source of inefficiency
they can eliminate it by price discrimination though
otherwise, they produce for profit maximisation i.e MR = MC
the question is so ambiguous...
a) is 7 cuz at p = 20, the firm is willin to produce up to 7 units (mc of 13 contrasting to 8th, which has mc of 21) and the firm can recoup it's variable cost (avc = 15.8<20)
b) is 0 as it firm will be willing to produce to 6th unit, provided that they recoup their variable cost (avc = 18 >10), they can't, so wise thing is not to produce...
c) well xiaoie didn't read the q properly, so i thought twas a monopolistic competition... but then again, it's perfect competition... the eqlbm q is at when LRATC = minimum... which is at q = 5... and for perfect competition, there are no super normal profit... so TC = TR... and TC = ATC x Q = 35... and TR = Q x P
so P = 7
d) is the ambiguous part... u don't really know if it is an increasing /decreasing /constant cost industry... in exam, i would have put all three scenarios down...
in this case, it is a constant cost industry, having long term supply curve of the industry as a horizontal line...
@ sarah: or the govtmt can put a price ceiling ^^
a) is 7 cuz at p = 20, the firm is willin to produce up to 7 units (mc of 13 contrasting to 8th, which has mc of 21) and the firm can recoup it's variable cost (avc = 15.8<20)
b) is 0 as it firm will be willing to produce to 6th unit, provided that they recoup their variable cost (avc = 18 >10), they can't, so wise thing is not to produce...
c) well xiaoie didn't read the q properly, so i thought twas a monopolistic competition... but then again, it's perfect competition... the eqlbm q is at when LRATC = minimum... which is at q = 5... and for perfect competition, there are no super normal profit... so TC = TR... and TC = ATC x Q = 35... and TR = Q x P
so P = 7
d) is the ambiguous part... u don't really know if it is an increasing /decreasing /constant cost industry... in exam, i would have put all three scenarios down...
in this case, it is a constant cost industry, having long term supply curve of the industry as a horizontal line...
@ sarah: or the govtmt can put a price ceiling ^^
yvonne_710
Don't Lie
the short answer part is tricky i think, oh well...it is indicated on our part2 average...in our stream, lots of ppl did wrong for d)...xiao1985 said: