: I need help please.

Question.

30) The figure above shows the market demand curve and the ATC curve for a firm. If all firms in 30) the market have the same ATC curve, the efficient scale for one firm is units per hour. A) 2,000 B) 4,000 C) 8,000 D) 10,000 E) more than 10,000 31) Which of the following is correct? 31) A) In the long run, a firm in monopolistic competition earns zero economic profit and its price is equal to the minimum average total cost. B) In the long run, a firm in monopolistic competition can earn an economic profit because of product differentiation. C) A firm in perfect competition operates at maximum average total cost in the long run. D) In the long run, a firm in monopolistic competition maximizes its profit at a point where price is equal to average total cost but the average total cost is not minimized. E) A firm in monopolistic competition does not have excess capacity in the long run. 8 32) A cartel is most likely to occur in 32) A) perfect competition as firms compete by reducing cost. B) oligopoly as firms compete to lower price and increase their own profits. C) monopolistic competition where firms collude to increase profits. D) monopoly because it faces no competition. E) oligopoly as firms act together to raise prices and increase profits. 33) When firms in monopolistic competition are making an economic profit, firms will 33) A) enter the industry, and demand will decrease for the original firms. B) exit the industry, and demand will increase for the firms that remain. C enter the industry and then will exit the industry. D) enter the industry, and demand will increase for the original firms. E) exit the industry, and demand will decrease for the firms that remain. 34) Herb's Inc. has a large share of its market and is tempted to collude with the few firms that are in 34) its market. Herb's operates in A) a perfectly competitive market. B) collusively protected market. C) a monopoly market. D) a monopolistically competitive market. E) an oligopoly. 35) A cartel is 35) A) a market structure with a large number of small firms. B) a market with only two firms. C) a group of firms acting together to raise price, decrease output, and increase economic profit. D) a market structure with a small number of large firms. E) another name for an oligopoly.25. You are asked to price some options on KYC stock. KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both out- comes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a European Put option on KYC with maturity of 2 years and a strike price of 100. (b) Price an American Put option on KYC with the same character- istics. Is the price different? Why or why not? 26. IBM is currently trading at $90.29 per share. You believe that IBM will have an expected return of 7% with volatility of 26.1% per year, while annual interest rates are at 0.95%. What is the price of an European put on IBM with a strike price of $90 and maturity of 1 year? 27. Shares of Ontel will sell for either $150 or $80 three months later, with probabilities 0.60 and 0.40, respectively. A European call with an exercise price of $100 sells for $25 today, and an identical put sells for $8. Both options mature in three months. What is a price of a three-month zero-coupon bond with a face of $100? 28. 401.com's stock is trading at $100 per share. The stock price will either go up or go down by 25% in each of the next two years. The annual interest rate is 5%. (a) Determine the price of a two-year European call option with the strike price X = $110. (b) Determine the price of a two-year European put option with the strike price X = $110. (c) Verify that the put-call parity holds. (d) Determine the price of a two-year American put option with the strike price X = $110. (e) What is the replicating portfolio (at every node of the tree) for the American put option with the strike price X = $110? 29. For this problem assume that the risk-free rate of interest for one year loans is 5%. Google stock is selling today for $500 a share. Assume that in one year Google will either be worth $600 a share or $475 a 16 3 2008, Andrew W. La and Jiang Wang 1.5 Options 1 QUESTIONS share and that Google will pay no dividends for at least two years. A call option with an exercise price of $550 and one year to go until expiration is available for Google stock. What is the value of this call option?72:40 AM 5. Just as demand depends on the price of a good. the quantity supplied is also closely related to the price. The following table, called as the supply schedule, describes the amount of ice creams that the seller, Ben, provides depending upon its price. a) Complete the table. The price of ice cream in The amount of ice cream wyr to.F dollar Pi ordyb provided (Cher Ish 1.50 2.00 2.50 300 b) Identify independent and dependent variables? What trend of quantity of supply do you observe? Explain in few sentences 6. Finding equation of a supply curve: a) Use x-axis for the quantity supplied (Q) and y-axis for the price (P), write each ordered pair (x, y) in the chart above. Plot the points and draw the graph of price and quantity supplied by joining them. The graph obtained is called a supply curve. b) Assuming that the trend is linear, use any two pairs of points on chart in Q-5a) to find the equation of the graph. 6. Determine the equilibrium quantity and the equilibrium price. In other words, for what price of the ice-cream will the quantity demanded be equal to the quantity supplied? (Hint: Solve the system of equations, namely demand and supply equations, that you found in Questions 3c), and 5b) using any algebraic methods and interpret the solution using10 40 4U 6, Determine the equilibrium quantity and the equilibrium price. In other words, for what price of the ice-cream will the quantity demanded be equal to the quantity supplied? (Hint: Solve the system of equations, namely demand and supply equations, that you found in Questions 3c), and 5b) using any algebraic methods and interpret the solution using the terminology of equilibrium quantity and the equilibrium price) 7. Graph by hand the supply and demand curve on the same set of axes, What is the solution to the system of equation? Does it match with the one you found algebraically? 8. Using Excel: Graph the demand curve and supply curve using EXCEL. Find the point of intersection of the two curves. How does it compares with the solution you found using algebraic method. 9. Comment on what would be rational for you as a consumer and Ben as a seller to do when the price of the ice cream is higher than the equilibrium price? What actions would you or Ben take if the price of the ice cream is lower than the equilibrium price? (Hint: Observe the graphs of the supply and demand curves that you have found in question 3 and 7 to reflect on the topic) 10. What have you learned from this activity? What mathematical skills you used to complete this assignment? Has this activity help you understand the mathematical concept better