Tim's Solar Panel Co manufactures and distributes solar panels in the U.S. market. Two years prior, it had 5 competitors in the market. However, government stimulus in the industry has now encouraged 7 new competitors to enter the market. At equilibrium, the price of Tim's panels:
a. is less than the average variable cost of production
b. is dictated by the forces of demand and supply present in the market.
c. is less than the fixed cost of production.
d. decrease in order to stay ahead of its competitors in the market.
b
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According to economic analysis, the optimal quantity of pollution exists at the point at which the
A) total benefit of pollution control is equal to the total cost. B) marginal benefit of pollution control is equal to the marginal cost. C) level of pollution is at zero. D) level of pollution is acceptable to the society.
Use the following general linear demand relation:Qd = 100 - 5P +0.004M - 5PRwhere P is the price of good X, M is income, and PR is the price of a related good, R. Income is $80,000, and the price of the related good is $40. Also let consumers' tastes change so that consumers now demand 100 more units at each price. When the price of the good is $50, how many units of the good are demanded?
A. 220 B. 200 C. 70 D. 100 E. none of the above