Principles of Microeconomics (ECO2103) Diploma in Business Administration Mehdi Tasaloti mehdi.tasaloti@newinti.edu.my Faculty of Business‚ Communication & Law (FOBCAL) INTI International University August 2014 Session Faculty of Business‚ Communications and Law INTI International University 1 Class syllabus for Long semester Week 1-3 4-6 Topic Economics Concepts‚ Issues & tools Price Theory ( Demand & Supply) / Individual assignment/ Test 1 7&8 Applications
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find the competitive quantity we set price equal to marginal cost and solve for Q: We obtain price by substituting the competitive quantity in the inverse demand function. Or we could simply note that with P = MC‚ price must be equal to 1‚ and then substitute this in the inverse demand equation and solve for Q. b) What is the equilibrium price and quantity of hangars if the market is monopolized? With an inverse demand of ‚ marginal revenue is given by (same intercept‚ twice as steeply
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*_MC=MR___Q=110________ Approximate mark up over cost ___*__There would be no mark up over cost___ In the long run‚ the price falls to $7.50. Why does this happen? *The business operates at the minimum average total cost (ATC)‚ which at $7.50 is equal to the marginal cost. Price‚ Cost What is the new profit maximizing output? _*_Minimum Average Total Cost (ATC)____Q=90_________________ $12.50 MC $10.00 ATC P=MR $7.50 $5.00 $2.50 $0.00 10 20 30 40 50 60 70 80 90 100 110 120 130 ! Quantity Page !2
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return the owner must ensure that he understands the concept of profit maximization. This essay will explain the relationship between marginal costs and revenue to give the firm a better understanding in profit maximization. To better understand how to maximize revenue the firm must first comprehend marginal revenue and how it relates to total revenue. Marginal revenue is the change in total revenue from the sale in one additional unit of product (McConnell‚ Bruce‚ Flynn‚ 2012). For example‚ two
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between marginal cost (MC) and marginal revenue (MR) is fairly easy to see‚ marginal cost is the extra cost from the production on one or more units of a particular item verses marginal revenue is the change in total revenue from the sale of one or more units of a particular item. There is a principal that explains the relationship between the two best called the MR=MC rule‚ which states “that a firm will maximize its profit (or minimize its losses) by producing the output at which marginal revenue
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OLIGOPOLY INTRODUCTION In this topic the oligopoly form of market is studied. You will learn that fewness of firms in a market results in mutual interdependence. The fear of price wars is verified with the help of the kinked demand curve. Collusive forms and non-collusive forms of market are analyzed. The economic effect of the oligopoly form of market is presented. OLIGOPOLY CHARACTERISTICS The oligopoly form of market is characterized by - a few large dominant firms‚ with many small ones‚ - a
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* Question 1 0 out of 1 points | | | Duopolists A and B face the following demand curves: QA = 120 2PA + PB and QB = 120 2PB + PA. If both firms have zero marginal cost and they form a cartel‚ what is the profit-maximizing price and quantity?Answer | | | | | Correct Answer: | a. P = 60‚ Q = 120 | | | | | * Question 2 1 out of 1 points | | | Total surplus in a market is a measure of:Answer | | | | | Correct Answer: | c. social welfare created by the market
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pertaining to a firm or a number of firms acting in a specific way is higher that its benefits. One might want to say for correctness purposes that one achieves social efficiency when "the marginal benefits to society - or marginal social benefits (MSB) of producing any given good or service exceed the marginal costs to
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Tutorial Questions Topic 1 1.1 Mary and Margaret have the same preferences and incomes. Just as Mary arrived at the cinema to watch a 3D movie‚ she discovered that she had lost the $100 ticket she had purchased earlier. Margaret also just arrived at the cinema planning to buy a ticket to watch the same movie when she discovered that she had lost a $100 note from her wallet. If both Mary and Margaret are rational (who make decisions to maximize economic surplus) and both still have enough money to
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taking that action minus its cost. • Question 4 10 out of 10 points Use the following cost table to answer the following question. Given the information on benefits and costs above‚ the optimal quantity equals: Quantity Marginal Benefit Average Cost Marginal Cost 1 2.99 1.00 1.00 2 2.99 2.00 3.00 3 2.99 3.00 5.00 4 2.99 4.00 7.00 Given the information on benefits and costs above‚ the optimal quantity
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