CSUF Perfect Competition and Market Structures Exam Practice

Description

2 attachmentsSlide 1 of 2attachment_1attachment_1attachment_2attachment_2.slider-slide > img { width: 100%; display: block; }
.slider-slide > img:focus { margin: auto; }

Unformatted Attachment Preview

California State University, Fullerton
Department of Economics
Professor Farka, Ph.D.
Economics 315
Extra Credit 3
Applied to Final Exam
SHOW ALL WORK TO RECEIVE CREDIT
Question 1
A firm in a perfectly competitive market has the following cost curve:
????
200
??
2??
The market demand is:
??
121 ??
There are 20 identical firms in the market (N =20) in the short-run.
a)
b)
c)
d)
e)
What is the firm’s supply function?
What is the market supply function in the short-run?
What is the market equilibrium price and quantity in the short-run?
What is the quantity that the firm produces in the short-run?
At the equilibrium price found in part (c), how much profit is each firm making in the short-run?
Will there be entry or exit in this market in the long-run?
f) What is the price of the product in the long-run?
g) How many firms are there in the market in the long-run?
h) How much profit is each firm making in the long-run?
Question 2
A monopoly has the following demand and Total Cost curve:
Demand : P ? 1000 ? 10Q
TC ? 100Q ? 5Q 2
a.
b.
c.
d.
Find the price and quantity that maximizes monopoly’s profits
How much profits does the monopoly make at the profit-maximizing level of quantity?
How much output would a perfectly competitive market produce? What price would it charge?
Calculate the deadweight loss from monopoly
Question 3
A monopolistically competitive firm has the following demand and total cost curves:
Demand : P ? 9 ? 0.25Q
TC ? 124 ? 16Q ? Q 2
1
a. Find the price and quantity that maximizes profits for the monopolistically competitive firm
b. How much profits does the monopolistically competitive firm make at the profit-maximizing level of
quantity?
c. Explain the following: What adjustments do you expect to happen in the market in the long-run?
What will happen to the demand curve of the firm (will it increase/decrease)? How much profits do
you expect the firm to earn in the long run?
Question 4
A monopoly has the following total cost function:
TC ? 40Q
and faces the following demand function
P ? 200 ? Q
a. Suppose that monopoly decides to practice 2nd degree price discrimination, as follows: it charges
$180 for the first 20 units of output, $160 for the next 20 units, and $140 for the next 20 units. What
are the profits of monopoly? What is consumer surplus? What is the deadweight loss?
Suppose that in addition to the above market (let’s call it market A) with demand P A ? 200 ? Q A (from
above), monopoly starts selling in another market (let’s call this market B) with the following demand
function: P B ? 80 ? 4Q B .
b. If monopoly considers the two markets combined (so it acts as a single-price monopoly), what
quantity and what price does it charge? What are its profits?
c. Now suppose that monopoly practices third degree price discrimination. What quantity does it
produce in each market and what price does it charge? What are its profits?
2
1. Hello I was wondering If you are able to take my econ exam tomorrow, it will be
about the same material you did yesterday. EXAM WILL BE BASED ON
MULTIPLE CHOICE, TRUE/FALSE AND FILL IN THE BLANK
QUESTIONS. More details as to what specific questions was provided in
the previous email.
2. The FILL in the BLANKS questions are calculation-based. You will answer
only numerical questions here.
3. A large number of questions are problem-solving type of questions (even in
multiple choice/true-false format), so please go over the problem-solving
questions in the study guide so you know how to solve the questions. They
will be tested in all 3 formats: Multiple Choice, True/False and Fill-in-theBlanks

Purchase answer to see full
attachment

Tags:
economics

market structures

Perfect Competition

User generated content is uploaded by users for the purposes of learning and should be used following FENTYESSAYS.COM ESSAY’s honor code & terms of service.