A firm in an oligopolistic industry has the following demand and total cost equations:
P = 600 - 20Q and TC = 700 + 160Q + 15Q2
Calculate:
a. quantity at which profit is maximized
b. maximum profit
c. quantity at which revenue is maximized
d. maximum revenue
e. maximum quantity at which profit will be at least $580
f. maximum revenue at which profit will be at least $580
If revenue and cost schedules are calculated:
a. 6; b. 680; c. 15; d. 4500; e. 8; f. 3520
If results are calculated with equations:
a. 6.286; b. 682.86; c. 15; d. 4500; e. 8; f. 3520
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A) 0. B) 1 million. C) 3 million. D) 5 million.
The IV regression assumptions include all of the following with the exception of
A) the error terms must be normally distributed. B) E(ui W1i,…, Wri) = 0. C) Large outliers are unlikely: the X's, W's, Z's, and Y's all have nonzero, finite fourth moments. D) (X1i,…, Xki, W1i,…,Wri, Z1i, … Zmi, Yi) are i.i.d. draws from their joint distribution.
Which of the following is true with respect to the price elasticity of demand?
a. The coefficient of price elasticity of demand will change with changes in the units of measurement (for instance, going from pounds to ounces). b. Elasticity of demand is equal to the slope of the demand curve. c. Elasticity measures the sensitivity of total expenditure to a change in price of a good. d. Elasticity will tend to be greater for a relatively expensive product than for a cheaper one. e. A coefficient of 1 means that the percentage change in total expenditure is equivalent to the percentage change in price.
As a firm increases its output in the short run, average fixed cost
a. rises steadily b. falls and then rises c. falls steadily d. rises and then falls e. remains unchanged