JeopardyFormulas

Perfect Competition Monopoly

Price Discrimination

Problems

Q $100

Q $200

Q $300

Q $400

Q $500

Q $100 Q $100Q $100 Q $100

Q $200 Q $200 Q $200 Q $200

Q $300 Q $300 Q $300 Q $300

Q $400 Q $400 Q $400 Q $400

Q $500 Q $500 Q $500 Q $500

Final Jeopardy

$100 Question from Formulas

Total Cost = ?

$100 Answer from Formulas

Total Cost = Fixed Cost + Variable Cost

$200 Question from Formulas

Total Revenue = ?

$200 Answer from Formulas

Total Revenue = Price * Quantity

$300 Question from Formulas

Marginal Cost = ?

$300 Answer from Formulas

Marginal Cost = Δtotal cost/Δquantity OrMarginal Cost = Δvariable cost/Δquantity

$400 Question from Formulas

Marginal Revenue = ?

$400 Answer from Formulas

Marginal Revenue = Δtotal revenue/Δquantity

$500 Question from Formulas

Profits = ?

$500 Answer from Formulas

Profits = Total Revenue – Total Cost

$100 Question from Perfect Competition

If the marginal revenue that a firm receives from producing one more unit exactly equal to the price it charges then what must be true?

$100 Answer from Perfect Competition

Perfect Competition

$200 Question from Perfect Competition

In Perfect Competition, a firm choosesq* at what point?

$200 Answer from Perfect Competition

Where Price = Marginal Cost

$300 Question from Perfect Competition

A Perfectly Competitive firm is selling 100 units at a market price of $10. It’s profits are$50,000, and the MC of the 100th unit is $8, what should they do?Increase quantityKeep quantity constant Decrease quantity

$300 Answer from Perfect Competition

Increase quantity since MC($8)<Price ($10)

$400 Question from Perfect Competition

A firm has TR of 40,000 FC of $50,000VC of $20,00What are profits?What should the firm do in the Short Run?The Long Run?

$400 Answer from Perfect Competition

Profits = -$20,000Firm should produce in the Short Run sinceTR>VCBut exit in the Long Run

$500 Question from Perfect Competition

Q MC

0 ---

1 5

2 6

3 7

4 8

5 9

6 10

In Perfect Competition, the market price is $8, what is q*?

$500 Answer from Perfect Competition

Q* = 4

$100 Question from Monopoly

If there are barriers to entry in a market, then thefirm must be what?

$100 Answer from Monopoly

A Monopoly

$200 Question from Monopoly

Suppose a firm made positive profits in the short run but zero profits in the long run this firm could not be what?

$200 Answer from Monopoly

Could not be a Monopoly

$300 Question from Monopoly

A Monopoly choose quantity at what point?

$300 Answer from Monopoly

Where MR=MC

$400 Question from Monopoly

Where does a Monopoly set its price?

$400 Answer from Monopoly

Find q* where MR=MC, then followthat all the way up to the demand curve.

$500 Question from Monopoly

What will a Monopoly do in the short run if ithas negative profits?

$500 Answer from Monopoly

It will produce only if it can cover its variable costs.

$100 Question from Price Discrimination

Suppose a firm can charge a different price to each consumer, what type of price discriminationis this?

$100 Answer from Price Discrimination

First-Degree price discrimination

$200 Question from Price Discrimination

When a firm charges different prices for different amounts of goods (i.e. bundling)they are using what type of price discrimination?

$200 Answer from Price Discrimination

Second-Degree Price Discrimination

$300 Question from Price Discrimination

When a firm charges different prices todifferent groups of people they are using what type of price discrimination?

$300 Answer from Price Discrimination

Third-Degree Price Discrimination

$400 Question from Price Discrimination

When a firm charges an upfront fee along withadditional charges later on, they are usingwhat type of price discrimination?

$400 Answer from Price Discrimination

A two-part tariff

$500 Question from Price Discrimination

Your Text Here

Customer Type Elasticity of Demand

A - 4.2

B - 0.7

C - 1.8

D - 2.1

E - 3.6

If a firm wants to start using third-degree price discrimination, and each consumer has a different elasticity of demand, which customerwould most likely pay the highest price?

$500 Answer from Price Discrimination

Consumer B, since they have the most inelasticdemand. Which means they are the least sensitive to price.

$100 Question from ProblemsLabor Quantity

1 10

2 18

3 24

Fill in the Average Product of Labor for each row.

$100 Answer from Problems

Your Text HereLabor Quantity APL

1 10 10

2 18 9

3 24 8

$200 Question from Problems

The Average Total Cost curve is at its minimum where it crosses what curve?

$200 Answer from Problems

The Marginal Cost Curve

$300 Question from Problems

Describe Monopolistic Competition

$300 Answer from Problems

There are several to many firms in the market.There is free entry and exit.Non-identical Products.Firm acts like a Monopoly in the short run(chooses MR=MC)Due to free entry and exit are like perfect competition in the Long Run.

$400 Question from Problems

Q P TR

0 120 0

1 110 110

2 100 200

3 90 270

4 80 320

5 70 350

6 60 360

If this is a Monopoly with a MC = 10, what quantity will it produce?

$400 Answer from Problems

Q = 6 calculate MR and find where it equalsMC.

$500 Question from H5

Your Text Here

Q MC

0 ---

1 10

2 7

3 5

4 9

5 15

6 20

If this is a Competitive Firm with FC of $20, what is the Total Cost of producing 5 units?

$500 Answer from Problems

TC = 66

Final JeopardyQ TC FC VC ATC AVC MC

0 0 -- -- --

1 13 10

2 2

3 2

4 10

5 6

Fill in the table

Final Jeopardy AnswerQ TC FC VC ATC AVC MC

0 10 10 0 -- -- --

1 13 10 3 13 3 3

2 15 10 5 7.5 2.5 2

3 16 10 6 5.3 2 1

4 20 10 10 5 2.5 4

5 30 10 20 6 4 10