ECON 1100 Lecture 3: SCI 1101 Day 3 Notes (8-22-17)
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Based on the three individual demand schedules below, and assuming these three people are the only ones in the society, determine the collective demand schedule on the assumption that the good is a public good. Responses go in the Amount society is willing to pay sections.
Individual 1 Individual 2 Individual 3 Public Demand
Price | Qd | Price | Qd | Price | Qd | Amount society is willing to pay | Qd |
$8 | 1 | $8 | 0 | $8 | 1 | ? | 1 |
7 | 2 | 7 | 0 | 7 | 2 | ? | 2 |
6 | 3 | 6 | 0 | 6 | 3 | ? | 3 |
5 | 4 | 5 | 1 | 5 | 4 | ? | 4 |
4 | 5 | 4 | 2 | 4 | 5 | ? | 5 |
3 | 6 | 3 | 3 | 3 | 6 | ? | 6 |
2 | 7 | 2 | 4 | 2 | 7 | ? | 7 |
1 | 8 | 1 | 5 | 1 | 8 | ? | 8 |
Ā | Ā | Ā | Ā | Ā | Ā | Ā | Ā |
Use the public demand schedule above and the following supply schedule to ascertain the optimal quantity of this public good.
Price | Quantity Supplied |
$22 | 10 |
21 | 8 |
20 | 6 |
19 | 4 |
18 | 2 |
17 | 0 |
Instructions: Enter your answer as a whole number.
Optimal quantity = ______?
This table shows the demand schedule, marginal cost, and average total cost for a monopolistically competitive firm.
Quantity |
Price |
Marginal Cost |
Average Total Cost |
0 |
$50 |
-- |
-- |
1 |
$45 |
$30 |
$40 |
2 |
$40 |
$24 |
$32 |
3 |
$35 |
$14 |
$26 |
4 |
$30 |
$10 |
$22 |
5 |
$25 |
$12 |
$20 |
6 |
$20 |
$32 |
$22 |
7 |
$15 |
$50 |
$26 |
8 |
$10 |
$74 |
$32 |
9 |
$5 |
$104 |
$40 |
10 |
$0 |
$140 |
$50 |
Refer to Table 16-4. How much profit will this firm earn when it chooses its output to maximize profit?
Ā | a. |
an $8 profit |
Ā | b. |
a $12 loss |
Ā | c. |
a $25 profit |
Ā | d. |
a $32 profit |