ECON-1006EL Study Guide - Final Guide: Marginal Revenue Productivity Theory Of Wages, Productive Efficiency, Price Floor
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The following table shows the demand curve and cost information for a firm that is monopoly
| Price | Quantity | TC |
| $10 | 0 | $500 |
| $9 | 200 | $1,000 |
| $8 | 400 | $1,600 |
| $7 | 600 | $2,500 |
| $6 | 800 | $4,000 |
What quantity should they produce to maximize their profits?
200 units
400 units
800 units
600 units
Mary competes in a monopolistically competitive market. Suddenly, 5 new firms enter the market causing her perceived demand curve to shift. The following tables show her original and new demand curves and her cost information.
Assume that Mary can only choose from the quantities of output given in the table. By how will the quantity that she produces change after the new firms enter the market?
Original Demand Curve
| Price | quantity | TC |
| 30 | 0 | $130 |
| 25 | 10 | $140 |
| 20 | 20 | $260 |
| 15 | 30 | $450 |
| 10 | 40 | $660 |
New Demand Curve
| 25 | 0 | $130 |
| 20 | 10 | $140 |
| 15 | 20 | $260 |
| 10 | 30 | $450 |
| 5 | 40 | $660 |
Decrease by 5
Decrease by 10
Increase by 10
Increase by 5
Monopolistic competitor has the following information about cost and demand
| Quantity | Price($) | Total Revenue ($) | Marginal Revenue ($) | Total Cost ($) | Marginal Cost ($) | Average Cost ($) |
| 0 | 25 | 0 | 25 | 30 | ---- | ---- |
| 2 | 24 | 48 | 23 | 35 | 2.5 | 17.5 |
| 4 | 23 | 92 | 21 | 45 | 5 | 11.25 |
| 6 | 22 | 132 | 19 | 60 | 7.5 | 10 |
| 8 | 21 | 168 | 17 | 77 | 8.5 | 9.63 |
| 10 | 20 | 200 | 15 | 100 | 11.5 | 10 |
| 12 | 19 | 228 | 13 | 126 | 13 | 10.5 |
| 14 | 18 | 252 | 11 | 165 | 19.5 | 11.79 |
| 16 | 17 | 272 | 9 | 210 | 22.5 | 13.13 |
| 18 | 16 | 288 | 7 | 260 | 25 | 14.44 |
| 20 | 15 | 300 | 5 | 320 | 30 | 16 |
If this industry was perfectly competitive, what price would the good sell for?
$19
$23
$21
$15
Monopolistic competitor has the following information about cost and demand
| Quantity | Price($) | Total Revenue ($) | Marginal Revenue ($) | Total Cost ($) | Marginal Cost ($) | Average Cost ($) |
| 0 | 25 | 0 | 25 | 30 | ---- | ---- |
| 2 | 24 | 48 | 23 | 35 | 2.5 | 17.5 |
| 4 | 23 | 92 | 21 | 45 | 5 | 11.25 |
| 6 | 22 | 132 | 19 | 60 | 7.5 | 10 |
| 8 | 21 | 168 | 17 | 77 | 8.5 | 9.63 |
| 10 | 20 | 200 | 15 | 100 | 11.5 | 10 |
| 12 | 19 | 228 | 13 | 126 | 13 | 10.5 |
| 14 | 18 | 252 | 11 | 165 | 19.5 | 11.79 |
| 16 | 17 | 272 | 9 | 210 | 22.5 | 13.13 |
| 18 | 16 | 288 | 7 | 260 | 25 | 14.44 |
| 20 | 15 | 300 | 5 | 320 | 30 | 16 |
What will the firm
An amusement park, whose customer set is made up of two markets, adults and children, has developed demand schedules as follows:
The marginal operating cost of each unit of quantity is $5. Because marginal cost is a constant, so is an average variable cost. Ignore fixed costs. The owners of the amusement part want to maximize profits.
|
Price ($) |
Quantity |
|
|
Adults |
Children |
|
|
5 |
15 |
20 |
|
6 |
14 |
18 |
|
7 |
13 |
16 |
|
8 |
12 |
14 |
|
9 |
11 |
12 |
|
10 |
10 |
10 |
|
11 |
9 |
8 |
|
12 |
8 |
6 |
|
13 |
7 |
4 |
|
14 |
6 |
2 |
Calculate the price, quantity, and profit if: The amusement park charges a different price in the adult market
Please express your answers for Price and Profit in whole dollars (i.e.10.00)
Please use whole numbers for Quantity (i.e. 10, 27, 4)
|
Price |
Quantity |
Total Revenue |
Marginal Revenue |
Marginal Cost |
Total Cost |
MR-MC |
Profit |
|
6 |
84 |
5 |
30 |
34 |
|||
|
13 |
91 |
7 |
5 |
35 |
2 |
56 |
|
|
12 |
8 |
96 |
5 |
5 |
40 |
0 |
|
|
9 |
99 |
3 |
5 |
45 |
-2 |
54 |
|
|
10 |
100 |
1 |
5 |
50 |
-4 |
50 |
|
|
9 |
11 |
99 |
-1 |
5 |
55 |
-6 |
|
|
12 |
96 |
-3 |
5 |
60 |
-8 |
36 |
|
|
7 |
91 |
-5 |
5 |
65 |
-10 |
26 |
|
|
6 |
14 |
84 |
-7 |
5 |
70 |
-12 |
|
|
5 |
15 |
75 |
-9 |
5 |
75 |
-14 |
0 |
The following data-series refers to a company's revenue.
| Year | Revenue |
| 1 | 1016 |
| 2 | 921 |
| 3 | 934 |
| 4 | 976 |
| 5 | 930 |
| 6 | 1052 |
| 7 | 1184 |
| 8 | 1089 |
| 9 | 1087 |
| 10 | 1154 |
| 11 | 1330 |
| 12 | 1980 |
| 13 | 2223 |
| 14 | 2203 |
| 15 | 2514 |
| 16 | 2726 |
| 17 | 3185 |
| 18 | 3351 |
| 19 | 3438 |
Use Holt's linear trend method, with an alpha of 0.76 and a beta* of 0.69, and an initial level value of 1583, and an initial slope value of 13.6 to forecast values for the next 10 years after Year 19.
Please create and upload your answers in an Excel file with formulas.
