This topic contains a solution. Click here to go to the answer

Author Question: Suppose the inverse supply curve in a market is Q = 6p2. If price decreases from 5 to 4, the change ... (Read 83 times)

TFauchery

  • Hero Member
  • *****
  • Posts: 500
Suppose the inverse supply curve in a market is Q = 6p2. If price decreases from 5 to 4, the change in producer surplus is
 
  A) 150.
  B) -54.
  C) -6.
  D) -122.

Question 2

Explain why a monopoly that knows the demand curve of identical consumers can set a two-part price with the lump sum tariff equal to the total amount of potential consumer surplus.
 
  What will be an ideal response?



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

mk6555

  • Sr. Member
  • ****
  • Posts: 310
Answer to Question 1

D

Answer to Question 2

The producer wants to set the lump sum price equal to the competitive level of consumer surplus. This maximizes the producer surplus. The consumer surplus measures the difference between the consumer's value of the good and the price paid for each unit. Thus, the consumers are willing to pay up to the total amount of consumer surplus.





 

Did you know?

Between 1999 and 2012, American adults with high total cholesterol decreased from 18.3% to 12.9%

Did you know?

The top five reasons that children stay home from school are as follows: colds, stomach flu (gastroenteritis), ear infection (otitis media), pink eye (conjunctivitis), and sore throat.

Did you know?

The U.S. Preventive Services Task Force recommends that all women age 65 years of age or older should be screened with bone densitometry.

Did you know?

About 60% of newborn infants in the United States are jaundiced; that is, they look yellow. Kernicterus is a form of brain damage caused by excessive jaundice. When babies begin to be affected by excessive jaundice and begin to have brain damage, they become excessively lethargic.

Did you know?

During the twentieth century, a variant of the metric system was used in Russia and France in which the base unit of mass was the tonne. Instead of kilograms, this system used millitonnes (mt).

For a complete list of videos, visit our video library