Author Question: A monopoly faces an inverse demand curve of P = 100 - 2Q. The marginal cost curve is MC = .5Q. What ... (Read 131 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?

Patients who cannot swallow may receive nutrition via a parenteral route—usually, a catheter is inserted through the chest into a large vein going into the heart.

Did you know?

The cure for trichomoniasis is easy as long as the patient does not drink alcoholic beverages for 24 hours. Just a single dose of medication is needed to rid the body of the disease. However, without proper precautions, an individual may contract the disease repeatedly. In fact, most people develop trichomoniasis again within three months of their last treatment.

Did you know?

Acetaminophen (Tylenol) in overdose can seriously damage the liver. It should never be taken by people who use alcohol heavily; it can result in severe liver damage and even a condition requiring a liver transplant.

Did you know?

All patients with hyperparathyroidism will develop osteoporosis. The parathyroid glands maintain blood calcium within the normal range. All patients with this disease will continue to lose calcium from their bones every day, and there is no way to prevent the development of osteoporosis as a result.

Did you know?

In 2010, opiate painkllers, such as morphine, OxyContin®, and Vicodin®, were tied to almost 60% of drug overdose deaths.

For a complete list of videos, visit our video library