12 May IF THE DEMAND CURVE IS LINEAR, BY HOW MUCH IS CONSUMER SURPLUS LARGER?
1. A (mini-) refrigerator monopolist, because of strong scale economies, would charge a price of $120 and sell forty-five refrigerators in Iceland. Its average cost would be $60. On the other hand, the Iceland Planning Commission has determined that five refrigerator suppliers would be sufficiently competitive to bring price into equality with average cost. The ?ve-?rm equilibrium would yield a price of $100 and a total output of ?fty refrigerators. a. Consumer surplus under the five-firm industry organization would be larger than under monopoly. If the demand curve is linear, by how much is consumer surplus larger? b. Profits under monopoly are larger â by how much? 1. Note: For this problem, assume that profits are the same as producer surplus. (This implicitly assumes ?xed costs are non- sunk, and so are part of the producer surplus measure). Use this fact for part c. c. If the Planning Commission thinks that total economic surplus is the correct criterion, which organization of the refrigerator industry will they choose?
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.