and does not price discriminate‚ what is the value of consumer and producer surplus at the point of profit maximization? Use the table. Show your calculations. Consumer surplus= (13‚ 000- 10‚ 000) + (12‚ 000- 10‚ 000) + (11‚ 000- 10‚ 000)+ (10‚ 000 – 10‚ 000) = 3‚ 000 + 2‚ 000 + 1‚ 000 = $6‚ 000 Therefore‚ the value of consumer surplus at the point of profit maximization is $6‚ 000. Producer surplus= ($14‚ 000 – $10‚000) x (4-
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If Ernie produced and Bert consumed one less bottle of water‚ what would happen to total surplus? Total surplus would fall by $2. d. 6. What are consumer surplus‚ producer surplus‚ and total surplus at this equilibrium? CS = $4 PS = $4 Total surplus = CS + PS = $4 + $4 = $8 If Ernie produced and Bert consumed one additional bottle of water‚ what would happen to total surplus? Total surplus would fall by $2. Note: A free market would not produce this result. Only if government
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and price of a perfect-price-discriminating monopolist. Find the profit-maximizing quantity and price of an imperfect-price-discriminating monopolist. Question: Each of the following firms possesses market power. Explain its source. a. Merck‚ the producer of the patented cholesterol-lowering drug Zetia b. Chiquita‚ a supplier of bananas and owner of most banana plantations c. The Walt Disney Company‚ the creators of Mickey Mouse Answer to Question: a. Merck has a patent for Zetia. This is an example
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policies resulted in disaster‚ generating a crisis in Chinese society as well as a massive famine that would in the end be resolved in ways unfavorable to Mao’s political‚ economic‚ and cultural vision of a future China. Mao wanted Chinese direct producers‚ particularly farmers‚ to use more advanced technologies than the relatively crude implements that were available but he argued against a continuation of the Stalinist approach because it relied on what we would today call capital-intensive investments
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STUDY GUIDE FOR FINAL EXAM Remember to bring a #2 pencil‚ eraser‚ non-programmable non-graphical calculator‚ a picture ID and your brain cells You an bring markers or highlighters to help you find consumer and producer surpluses for the graphs in chapters 9 and 7 The final consists of 50 multiple choice questions. Number of questions from each chapter is highlighted. BASIC RULE TO USE WHEN STUDYING: THE MORE RECENT THE MATERIAL‚ THE MORE TIME YOU SHOULD SPEND STUDYING IT Material which was
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Econ 102 Version A Fall 2007 Exam 2 There are 25 questions. Please make sure you have them all. 1. When the price of bubble gum is $0.50‚ the quantity demanded is 400 packs per day. When the price falls to $0.40‚ the quantity demanded increases to 600. Given this information and using the midpoint method‚ we know that the demand for bubble gum is a. inelastic. b. elastic. c. unit elastic. d. perfectly inelastic. 2. Using the midpoint method‚ the price elasticity of demand for a good
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at the end) 1. Each month Jacquelyn spends exactly $50 on ice cream regardless of the price. Jacquelyn’s price elasticity of demand for ice cream is: A) zero. B) one. C) greater than one. D) less than one‚ but greater than zero. 2. Egg producers know that the elasticity of demand for eggs is 0.1. The hens went crazy and laid 5% more eggs than usual. To sell all those additional eggs‚ they will have to lower price by: A) B) C) D) 0.1% 1% 5% 50% 3. Nations can gain from trade
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Constraints on the Market and Alternative Rationing Mechanisms Prices and the Allocation of Resources Price Floors Supply and Demand Analysis: An Oil Import Fee Supply and Demand and Market Efficiency Consumer Surplus Producer Surplus Competitive Markets Maximize the Sum of Producer and Consumer Surplus Potential Causes of Deadweight Loss from Under- and Overproduction Looking Ahead Demand and Supply Applications Prepared by: Fernando & Yvonn Quijano © 2007 Prentice Hall Business Publishing
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A market is a situation where potential buyers are in contact with potential sellers. A market is any place‚ physical or virtual‚ where the buyer and seller (of goods and services) meet. Market can be local‚ where buyers and sellers are from the surrounding area. Markets can be national‚ where the participants are from within the market country. Markets can be international‚ where the market participants come from any country in the world. Resource market Households sell Business buy Product
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ceiling‚ the tendency for the sugar’s price to rise to its own equilibrium cannot be fully realized because everyone is forbidden to trade at the equilibrium price. The result is an effective price ceiling may leads to a black market which the producers is willing to sold the price-controlled good at an illegally high price through various methods. To ensure that the black market does not appear‚ government can apply non-price rationing policy where the consumers will be forced to purchase a limited
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