1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Bezzdna [24]
3 years ago
15

Dayna’s Doorstops, Inc. (DD) is a monopolist in the doorstop industry. Its cost is C  100  5Q  Q2, and demand is P  55  2Q.

a. What price should DD set to maximize profit? What output does the firm produce? How much profit and consumer surplus does DD generate? b. What would output be if DD acted like a perfect competitor and set MC  P? What profit and consumer surplus would then be generated? c. What is the deadweight loss from monopoly power in part a? d. Suppose the government, concerned about the high price of doorstops, sets a maximum price at $27. How does this affect price, quantity, consumer surplus, and DD’s profit? What is the resulting deadweight loss? e. Now suppose the government sets the maximum price at $23. How does this decision affect price, quantity, consumer surplus, DD’s profit, and deadweight loss? f. Finally, consider a maximum price of $12. What will this do to quantity, consumer surplus, profit, and deadweight loss?
Business
1 answer:
Sauron [17]3 years ago
6 0

Answer:

Explanation:

Given the following data about Dayna's Doorstep Inc(DD) :

Cost given by; C = 100 - 5Q + Q^2

Demand ; P = 55 - 2Q

A.) Set price to maximize output;

Marginal revenue (MR) = marginal cost (MC)

MR = taking first derivative of total revenue with respect to Q; (55 - 2Q^2)

MC = taking first derivative of total cost with respect to Q; (-5Q + Q^2)

MR = 55 - 4Q ; MC = 2Q - 5

55 - 4Q = 2Q - 5

60 = 6Q ; Q = 10

From

P = 55 - 2Q ;

P = 55 - 2(10) = $35

Output

35(10) - [100-5(10)+10^2]

350 - 150 = $200

Consumer surplus:

0.5Q(55-35)

0.5(10)(20) = $100

B.) Here,

Marginal cost = Price

2Q - 5 = 55 - 2Q

4Q = 60 ; Q = 15

P= 55 - 2(15) = $25

Totally revenue - total cost:

(25)(15) - [100-(5)(15)+15^2] = $125

Consumer surplus(CS) :

0.5Q(55-25) = 0.5(15)(30) = $225

C.) Dead Weight loss between Q=10 and Q=15, which is the area below the demand curve and above the marginal cost curve

=0.5×(35-15) ×(15-10)

=0.5×20×5 = $50

D.) If P=$27

27 = 55 - 2Q

2Q = 55 - 27

Q = 14

CS = 0.5×14×(55 - 27) = $196

DWL = 0.5(1)(4) = $2

You might be interested in
Delia files a suit against Eduardo in a Florida state court over the ownership of a boat docked in a Florida harbor. Both Delia
harkovskaia [24]

Answer:

The answer is: D) is a more convenient location to hold the trial.

Explanation:

A change of venue happens when a case is transferred from a court in one location to a court in a different location. It can be requested if it is convenient for the parties in a lawsuit.

In this case both Eduardo and Delia live in Georgia, so if a trial is held there, they would need to travel and probably hire local lawyers which can be time consuming and expensive.  Eduardo can argue that by holding the case in Georgia benefits both Delia and him.

6 0
3 years ago
Which statement(s) most directly apply to capitalism? i. there is heavy government regulation of industry. ii. individuals can s
Kisachek [45]

The most directly applied sentence for capitalism is the price and availability of goods are determined primarily by the market. As the market is a free market in the economy.

<h3>What is Capitalism?</h3>

Capitalism is commonly thought of as an economic system in which private actors own and control the property.

According to their own interests, demand and supply freely set market prices in ways that benefit society.

 

Thus, option D which is iii only is correct.

For further details about capitalism refer to this link:

brainly.com/question/414301

3 0
2 years ago
A product sells for $200 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. If the firm wants to
ruslelena [56]

Answer:

A 6,500

Explanation:

The number of units to be sold is calculated as;

= (Pretax income + Fixed costs) ÷ Contribution margin

Given that;

Pretax income = $35,000

Fixed costs = $420,000

Contribution margin

= Selling price per unit - Variable cost per unit

= $200 - $130

= $70

= ($35,000 + $420,000) ÷ $70

= 6,500 units

6 0
2 years ago
MacHeath Inc. bought 60% of the outstanding common stock of Nomes Inc. in an acquisition that resulted in the recognition of goo
kiruha [24]

Answer:

c) $600,000.

Explanation:

$600,000.00 is the value that will be attributed to land in a consolidated balance sheet at the date of acquisition?

In the acquisition process,  assets and liabilities of the business being bought get evaluated to ascertain their true worth.  Assets such as land, buildings, and machinery undergo valuation. Their market value or fair value is recorded in the books of the acquiring entity as the actual value of the asset at the time of acquisition.

8 0
3 years ago
A stock has a beta of 0.9 and an expected return of 9 percent. A risk-free asset currently earns 4 percent. a. What is the expec
egoroff_w [7]

Answer:

6.5%

Explanation:

Data given in the question

Beta of the stock = 0.9

Expected return = 9%

A risk-free asset = 4%

By considering the above information, the expected return on a portfolio is

= Risk - free asset × equally basis  + expected rate of return × equally basis

= 4% × 50% + 9% × 50%

= 2% + 4.5%

= 6.5%

Since we have to find out the expected return on equally invested so we considered the risk free asset and the expected rate of return

Therefore we ignored the beta of the stock

8 0
3 years ago
Other questions:
  • A __________ bond gives the issuer an option to retire the bond before maturity at a specific price after a specific date.
    13·1 answer
  • Jack is preparing for a party and makes potato salad, but he does not realize that the salad contains one escherichia coli bacte
    15·1 answer
  • Jimmy Company uses the weighted-average method in its process costing system. The ending work in process inventory consists of 9
    10·1 answer
  • The only difference between variable and absorption costing is the expensing of ________.A) direct manufacturing costs B) variab
    12·1 answer
  • The Unadjusted Trial Balance columns of a work sheet total $97,500. The Adjustments columns contain entries for the following:
    8·1 answer
  • Jason just joined a new gym and signed up for a one-year membership. Membership fees can be paid in 12 monthly payments of $50,
    12·1 answer
  • The Mugger sells three types of mugs, flowers, dogs, and sports. The following information is available: Flowers Dogs Sports Tot
    11·1 answer
  • For each of the following entities, identify if the entity would be governed by GASB standards by selecting a "G", FASB standard
    5·1 answer
  • Keynes argued that: Group of answer choices the distinction between the short run and the long run is irrelevant. the long run i
    13·1 answer
  • in online rental scams, con artists fraudulently rent out a property they don't own and collect the funds. where do they get the
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!