Questions from General Economics

Q: A publisher faces the following demand schedule for the next novel from

A publisher faces the following demand schedule for the next novel from one of its popular authors: Price Quantity ……...… Demanded $100……………………… 0 novels 90………………………… 100,000 80………………………… 200,000 70…...

Q: A small town is served by many competing supermarkets, which have

A small town is served by many competing supermarkets, which have the same constant marginal cost. a. Using a diagram of the market for groceries, show the consumer surplus, producer surplus, and tota...

Q: Johnny Rockabilly has just finished recording his latest CD. His record

Johnny Rockabilly has just finished recording his latest CD. His record company’s marketing department determines that the demand for the CD is as follows: Price ……..…… Number of CDs $24 …………………………10...

Q: Draw a diagram depicting a firm that is making a profit in

Draw a diagram depicting a firm that is making a profit in a monopolistically competitive market. Now show what happens to this firm as new firms enter the industry.

Q: A company is considering building a bridge across a river. The

A company is considering building a bridge across a river. The bridge would cost $2 million to build and nothing to maintain. The following table shows the company’s anticipated demand over the lifeti...

Q: Larry, Curly, and Moe run the only saloon in town

Larry, Curly, and Moe run the only saloon in town. Larry wants to sell as many drinks as possible without losing money. Curly wants the saloon to bring in as much revenue as possible. Moe wants to mak...

Q: The residents of the town Ectenia all love economics, and the

The residents of the town Ectenia all love economics, and the mayor proposes building an economics museum. The museum has a fixed cost of $2,400,000 and no variable costs. There are 100,000 town resid...

Q: Consider the relationship between monopoly pricing and price elasticity of demand.

Consider the relationship between monopoly pricing and price elasticity of demand. a. Explain why a monopolist will never produce a quantity at which the demand curve is inelastic. (Hint: If demand is...

Q: You live in a town with 300 adults and 200 children,

You live in a town with 300 adults and 200 children, and you are thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000, but se...

Q: In your diagram from the previous question, show the level of

In your diagram from the previous question, show the level of output that maximizes total surplus. Show the deadweight loss from the monopoly. Explain your answer.