COMM 220 Lecture Notes - Lecture 10: Economic Surplus

• School: Concordia University
• Department: Commerce
• Course: COMM 220
• Professor: Krista Riley

Document Summary

Comm 220 practice problem set 3 solutions (part ii: for the 6 firms: mc = p = 4q. These 6 firms have supply curves: q = p/4 if p and q = 0 if p < . For the 4 firms: mc = p = 8q. These 4 firms have supply curves: q = p/8 if p and q = 0 if p < . Q = 6*p/4 = 1. 5p if p < 12 if p < . Q = 6*p/4 + 4*p/8 = 2p if p . 0 18 27 36 48 quantity: (a) vc = 0. 024q2 + 6q. Mc = 0. 048q + 6 (b) p > min atc and min atc occurs when mc = atc. P > 0. 048(325) + 6 = . 6 (c) profit maximized when p = mc. Producer surplus = (30)(500) [0. 024(5002) + 6(500)] = .