Chapter 18: Problem 654
Define pure competition.
Chapter 18: Problem 654
Define pure competition.
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Given that firm \(\mathrm{A}\) has demand function \(\mathrm{P}=15-.05 \mathrm{q}\) and total cost function, \(\mathrm{TC}=\mathrm{q}+.02 \mathrm{q}^{2}\) a) find the point of profit maximization b) find maximum profit if a \(\$ 1 /\) unit tax is imposed.
Suppose an economy possesses presently 60 million automobiles; and that each automobile must be replaced every 5 years. Suppose also that the present population of 240 million people grows \(2 \%\) per year. Calculate on the basis of these data, all other things remaining equal, the expected demand for automobiles for this year.
How does one arrive at the aggregate supply curve (for an entire industry)?
Mr. A owns 1,000 shares of General Electric common stock. If he tries to sell some, he finds he can get a price of \(\$ 61.50\) per share for all 1,000 shares. If he offers only 500 shares, he can get a price of \(\$ 61,625\) which is \(\$ 0,125\) more per share. That is, reducing his amount sold by a half, he can get a price that is higher by about \(1 / 500\). If he sought a price of \(\$ 61.75\), he would sell nothing. Mr. A considers this an insignificant rise in price as a result of withholding his supply. Is this an example of a price- takers' market? Compute \(\mathrm{Mr}\). A's marginal revenues as best you can with the given data.
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