Consider a perfectly competitive market that consists of 20 consumers with identical preferences. Their preference is given by v(x) = 200-2(x-10)^2 if x<10 or x=10, and 200 if x>10. The industry supply of this market is s(p) = 5p. The equilibrium price of this market is
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- Suppose that BMW can produce any quantity of cars at a constant marginal cost equal to$50 and a fixed cost of $22,500. You are asked to advise the CEO as to what prices andquantities BMW should set for sales in Europe and in the United States to maximize its profits.The demand for BMWs in each market is given by:QE = 8,000 – 80PE and QU = 4,000 – 20 PU,where the subscript E denotes Europe, the subscript U denotes the United States. Assume thatBMW can restrict U.S. sales to authorized BMW dealers only. Support your answersgraphically as well.a. If, by an international agreement between Europe and United States, BMW wereforced to charge the same price in each market, what would be the quantity sold in eachmarket, the equilibrium price, and the company’s profit?b. Suppose now that Europe and United States signed a new trade package under whichBMW now can charge different prices across the two markets. What quantity of BMWsshould the firm sell in each market, and what should the price be…Suppose we have many firms each with an individual supply curve of g$= ½ P). Assume that firms have a quasi-fixed cost of $5000 (that is COST = 0 if they exit but COSTS = 5000 + variable costs if they are open). Hence Cost = q² + 5000 if active. Individual demand is Qº= 100 - ½ P (a)_Let there be n = 100 firms and 500 consumers. What is the equilibrium market price, output per firm, and consumption per consumer given the fixed number of firms? Show and explain. (b)_Find each consumer's Consumer Surplus. Show your work.< (c) Find profits per firm. What does this imply for entry/exit decisions? Show your work. < (d) Now let the number of firms change so that each firm's profits are zero. How many firms will there be in the long-run equilibrium? Show and explain why the long-run equilibrium price is $141.42. <A company produces a special new type of TV. The company has fixed costs of $477,000, and it costs $1100 to produce each TV. The company projects that if it charges a price of $2500 for the TV, it will be able to sell 750 TVs. If the company wants to sell 800 Tvs, however, it must lower the price to $2200. Assume a linear demand. What price should the company charge to earn a profit of $953,000? it would need to charge $_____.
- Suppose that BMW can produce any quantity of cars at a constant marginal cost equal to $50 and a fixed cost of $22,500. You are asked to advise the CEO as to what prices and quantities BMW should set for sales in Europe and in the United States to maximize its profits. The demand for BMWS in each market is given by: QE = 8,000 - 80PE and Qu = 4,000 - 20 Pu, where the subscript E denotes Europe, the subscript U denotes the United States. Assume that BMW can restrict U.S. sales to authorized BMW dealers only. Support your answers %3D graphically as well. a. If, by an international agreement between Europe and United States, BMW were forced to charge the same price in each market, what would be the quantity sold in each market, the equilibrium price, and the company's profit? b. Suppose now that Europe and United States signed a new trade package under which BMW now can charge different prices across the two markets. What quantity of BMWS should the firm sell in each market, and what…Consider PNW Airlines, an airline focused on transporting cargo. Their fleet is composed of four cargo airplanes. Total cargo capacity of the fleet is 100,000 cubic feet. The monthly cost of maintaining and operating the fleet is $50,000. Market research indicated that the demand curve for cargo capacity is d=300,000-25,000p where d is the demand across all segments and p is the transport price per cubic foot. Question 1: What is the price that maximizes profit for PNW Airlines if all the demand comes from a single segment? What is the demand if PNW sets price to be the value found in Question 1? How much profit does PNW Airlines make?Consider a market where every firm and every potential entrant has the identical cost functionC(q) = 3q3 − 6q2 + 6q.(a) Find the firm’s inverse supply function. b)SupposethemarketdemandfunctionisgivenbyQD(P)=20−2P.Find the long-run equilibrium price, quantity, and the number of firms. (c)Suppose the demand function suddenly becomes perfectly inelastic at quantity Q ̄ = 7. Find the long-run equilibrium price, quantity and the number of firms.(d) [5] Suppose the demand becomes perfectly inelastic at quantity Q ̄ = 7, and the government decides to collect a per unit tax of t = 4 from the producers for every unit of the good they sell. Find the long-run equilibrium price, quantity and the number of firms Please express final numerical answers in decimal format Equation attached below
- A company produces a special new type of TV. The company has fixed costs of $451,000, and it costs $1000 to produce each TV. The company projects that if it charges a price of $2600 for the TV, it will be able to sell 800 TVs. If the company wants to sell 850 TVs, however, it must lower the price to $2300. Assume a linear demand. If the company sets the price at $3800, how much profit can it earn? It can expect to earn/lose $enter your response here. (Round answer to nearest dollar.)A company produces a special new type of TV. The company has fixed costs of $468,000, and it costs $1400 to produce each TV. The company projects that if it charges a price of $2400 for the TV, it will be able to sell 750 TVs. If the company wants to sell 800 TVs, however, it must lower the price to $2100. Assume a linear demand. What price should the company charge to earn a profit of $742,000?n Gas Pump, South Dakota, there are two kinds of consumers, Buick owners and Dodge owners. Every Buick owner has a demand function for gasoline DB(p)=20 − 5p for p ≤ 4and DB(p) = 0 if p> 4. Every Dodge owner has a demand function DD(p)= 15 − 3p for p ≤ 5 and DD(p) = 0 for p> 5. (Quantities are measured in gallons per week and price is measured in dollars.) Suppose that Gas Pump has 150 consumers, 100 Buick owners, and 50 Dodge owners.a. If the price is $3, what is the total amount demanded by each individual Buick Owner? And by each individual Dodge owner? What is the total amount demanded by all consumers in Gas Pump at a price of 3?b. Use ink to draw the demand curve representing the total demand by Buick owners on the graph. Use ink to draw the demand curve representing total demand by Dodge owners. Use ink to draw the market demand curve for the whole town. (make some labels)c. At what prices does the market demand curve have kinks? When the price of gasoline is $1 per…
- A large share of the world supply of diamonds comes from Russia and South Africa. Suppose that the marginal cost of mining diamonds is constant at $2,000 per diamond, and the demand for diamonds is described by the following schedule: Price Quantity (Dollars) (Diamonds) 8,000 2,000 7,000 3,000 6,000 4,000 5,000 5,000 4,000 6,000 3.000 7,000 2,000 8,000 1,000 9,000 If there were many suppliers of diamonds, the price would be S per diamond and the quantity sold would be diamonds. If there were only one supplier of diamonds, the price would bes per diamond and the quantity sold would be diamonds. Suppose Russia and South Africa form a cartel. In this case, the price would be S per diamond and the total quantity sold would be diamonds. If the countries split the market evenly, South Africa would produce diamonds and earn a profit of $ If South Africa increased its production by 1,000 diamonds while Russia stuck to the cartel agreement, South Africa's profit would to Why are cartel…A firm faces two types of consumers. Consumer A has an inverse demand of P = 120-10 Q and consumer B has an inverse demand of P = 60-2Q. The firm has a constant marginal cost of $20. Assume the firm does not know which type a given consumer is. She offers to sell the good at a price of 70$ per unit. However, if the customer buys 10 or more units, she will offer a quantity discount and charge only 40$ per unit (including the first 10). Which consumer will use the price discount? Question 7 options: Neither costumer will purchase from this firm at all. Customer A will choose the quantity discount and customer B will not choose the quantity discount. Both consumers will chose the quantity discount. Neither of the two consumers will opt for the quantity discount. Instead, both will purchase at the higher price of 70 and buy less than 10 units each. Customer B will choose the quantity…A firm faces two types of consumers. Consumer A has an inverse demand of P = 120- 10 Q and consumer B has an inverse demand of P = 60-2Q. The firm has a constant marginal cost of $20. Assume the firm does not know which type a given consumer is. She offers to sell the good at a price of 70$ per unit. However, if the customer buys 10 or more units, she will offer a quantity discount and charge only 40$ per unit (including the first 10). Which consumer will use the price discount? Both consumers will chose the quantity discount. Neither of the two consumers will opt for the quantity discount. Instead, both will purchase at the higher price of 70 and buy less than 10 units each. Customer A will choose the quantity discount and customer B will not choose the quantity discount. Customer B will choose the quantity discount and customer A will not choose the quantity discount. Neither costumer will purchase from this firm at all.