ECON 2P23 Chapter Notes - Chapter 4: Sharp-P
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Please help with ALL (5) questions and show work/explain... thank you
You are given the following data for your firm, which sells high-capacity video MP3 players.
Q | P | TC |
0 | 78 | $100,000 |
1,000 | 76 | $125,500 |
2,000 | 74 | $144,000 |
3,000 | 72 | $158,500 |
4,000 | 70 | $172,000 |
5,000 | 68 | $187,500 |
6,000 | 66 | $208,000 |
7,000 | 64 | $236,500 |
8,000 | 62 | $276,000 |
9,000 | 60 | $329,500 |
10,000 | 58 | $400,000 |
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QUESTION 1:
Which of the following represents the correct formulas for P and MR in terms of QD?
Select one:
a. P = 78 - 0.004QD; MR = 78 - 0.008QD
b. P = 39,000 - 500QD; MR = 39,000 - 1,000QD
c. P = 78 - 0.002QD; MR = 78 - 0.004QD
d. P = 39,000 - 500QD; MR = 39,000 - 250QD
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QUESTION 2: Which of the following equations is correct, based on the data above?
Select one:
a. MC = 0.0000015Q2 - 0.01Q + 30
b. AVC = 0.0000005Q2 - 0.005Q + 30 + 100000/Q
c. AVC = 0.0000005Q2 - 0.005Q + 30/Q
d. ATC = 0.0000005Q3 - 0.005Q2 + 30Q + 100000
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QUESTION 3. The profit-maximizing quantity occurs at _______ and at _________.
(Since MC is in terms of Q2, solving with calculus and algebra can be messy. Your table should give an exact answer.)
Select one:
a. Q = 6,000; P = $66
b. Q = 8,000; P = $46
c. Q = 8,000; P = $62
d. Q = 2,000; P = $74
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QUESTION 4.
How much total profit would your firm earn if you set P and Q at their profit-maximizing levels?
Select one:
a. $276,000
b. $220,000
c. $0; break even.
d. $496,000
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QUESTION 5.
Describe the competitiveness of the market by calculating the Lerner index.
Select one:
a. 62%
b. 46%
c. â 34.8%
d. â 25.8%