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ECON 120W Lecture Notes - Lecture 13: Price Discrimination, Perfect Competition

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mauvebeetle363
25 Sep 2020
School
University of Waterloo
Department
Economics
Course
ECON 120W
Professor
Ziss

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Document Summary

200 (i) use mr and mc to find profit maximizing prices if firm can price discriminate between workers and tourists (ii) use mr and mc to find profit maximizing price if firm can"t price discriminate between workers and tourists. Cartels: a cartel is a group of firms that agree to maximize the sum of member profits (joint profits). If all firms join the cartel then the cartel produces at the monopoly level by . Setting industry mr = industry mc (mci: mci is derived by equating mc across firms, mci equals competitive market s curve. Using quotas to restrict output of each firm: cartel problems include . Find p, q, q & pi for cartel & perfect competition.

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Related Questions

Consider the following table of costs for the Winsome Widget Factory, which operates in a perfectly competitive market. The market price faced by this firm is $6.00 per widget.

Output Total Cost
0 100
10 150
20 180
30 200
40 240
50 300
60 375
70 475
80 600
90 750
100 1,000

a. Fill in the formula for AFC, AVC, ATC, MC, TR, MR, and Total Profit.

b. Fill in the missing values for TFC, TVC, AFC, AVC, ATC, MC, TR, MR, and Total Profit.

Gulp and Devour              
Output TR TC Profit AC Price MR MC Marginal
                Profit
1 135 100 35 100 135 135 100 35
2 260 200 60 100 130 125 100 25
3 375 300 75 100 125 115 100 5
4 480 400 80 100 120 105 100 5
5 575 500 75 100 115 95 100 -5
6 660 600 60 100 110 85 100 -15
7 735 700 35 100 105 75 100 -25
8 800 800 0 100 100 65 100 -35
Shady Enterprise              
Output TR TC Profit AC Price MR MC Marginal
                Profit
1 160 50 110 50 160 160 50 110
2 300 125 175 62.5 150 140 75 65
3 420 220 195 75 140 120 100 20
4 520 350 170 87.5 130 100 125 -25
5 600 500 100 100 120 80 150 -70
6 660 675 -15 112.5 110 60 175 -115
7 700 875 -175 125 100 40 200 -160
8 720 100 -380 137.5 90 20 225 -205

What is the profit-maximizing output for each case? Show that three criteria are equivalent: marginal cost equals marginal revenue, maximum profit, and marginal profit equals zero.

Below are supply and demand schedules for calzones at a local pizzeria. Use the information in these tables to answer the following five questions.

Demand

P: $13 $12 $11 $10 $9 $8 $7 $6 $5 $4

Q: 20 40 60 80 100 120 140 160 180 200

Supply

P: $4 $5 $6 $7 $8 $9 $10 $11 $12 $13

Q: 10 20 30 40 50 60 70 80 90 100 110

1.What is the equilibrium price? $10 correct

2.At what price is there a shortage of 60 calzones? $8 correct

3.At what price is there a surplus of 60 calzones? $11 incorrect

4. At a price of $13, there is a surplus of how many calzones? 110 incorrect

5. At a price of $10, there is a shortage of how many calzones?