The market demand for a monopoly firm is estimated to be:Qd = 100,000 - 500P + 2M + 500PRwhere Qd is quantity demanded, P is price, M is income, and PR is the price of a related good. The manager has forecasted the values of M and PR will be $50,000 and $20, respectively, in 2016. The average variable cost function is estimated to beAVC = 520 - 0.03Q + 0.000001Q2Total fixed cost in 2016 is expected to be $4 million. The estimated marginal cost function is
A. SMC = 260 - 0.03Q + 0.000015Q2.
B. SMC = 260 - 0.015Q + 0.000005Q2.
C. SMC = 520 - 0.06Q + 0.000003Q2.
D. SMC = 520 - 0.03Q + 0.000002Q2.
E. none of the above
Answer: C
Economics
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Which of the following suggests that private markets can be effective in dealing with externalities?
a. the "invisible hand" b. the law of diminishing social returns c. the Coase theorem d. technology policy
Economics
If the more-is-better principle holds, two different consumption bundles can't be equally attractive unless:
A. they contain the same amounts of each good. B. the consumer is unable to rank both bundles. C. as the consumer gives up some of one good, the consumer is given more of the other good. D. they each cost the same amount to purchase.
Economics