Author Question: A monopoly faces an inverse demand curve of P = 100 - 2Q. The marginal cost curve is MC = .5Q. What ... (Read 145 times)

aabwk4

  • Hero Member
  • *****
  • Posts: 593
A monopoly faces an inverse demand curve of P = 100 - 2Q. The marginal cost curve is MC = .5Q. What government price ceiling would represent optimal price regulation?
 
  What will be an ideal response?

Question 2

Suppose the long-run supply curve for a perfectly competitive industry is horizontal at a price of 12, and the minimum short-run average variable cost for each of the identical N firms in the industry is 8. If the demand curve for the industry decreases so that it intersects the short-run supply curve of the industry at 10,
 
  A) in the short run the price will decrease to 10, and the number of firms will still be N. In the long run the price will return to 12, and the number of firms will be less than N.
  B) in the short run the price will decrease to 10, and the number of firms will be less than N. In the long run the price will return to 12, and the number of firms will return to N.
  C) in the short run the price will remain at 12, and the number of firms will still be N. In the long run the price will fall to 8, and the number of firms will be less than N.
  D) In the short run the price will decrease to 10, and the number of firms will be less than N. In the long run the price will return to 12, and the number of firms will return to N.


meltdown117

  • Sr. Member
  • ****
  • Posts: 326
Answer to Question 1

Setting P = 100 - 2Q = .5Q = MC, the optimal price ceiling is 40.

Answer to Question 2

A



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

There are approximately 3 million unintended pregnancies in the United States each year.

Did you know?

Although puberty usually occurs in the early teenage years, the world's youngest parents were two Chinese children who had their first baby when they were 8 and 9 years of age.

Did you know?

The Food and Drug Administration has approved Risperdal, an adult antipsychotic drug, for the symptomatic treatment of irritability in children and adolescents with autism. The approval is the first for the use of a drug to treat behaviors associated with autism in children. These behaviors are included under the general heading of irritability and include aggression, deliberate self-injury, and temper tantrums.

Did you know?

Most women experience menopause in their 50s. However, in 1994, an Italian woman gave birth to a baby boy when she was 61 years old.

Did you know?

People often find it difficult to accept the idea that bacteria can be beneficial and improve health. Lactic acid bacteria are good, and when eaten, these bacteria improve health and increase longevity. These bacteria included in foods such as yogurt.

For a complete list of videos, visit our video library