NU: ECO 100: Homework assignment #2 for Micro:(50 points)

1.

a) Explain three differences between the perfectly competitive market structure and an imperfect market structure, such as a monopoly market structure.(6 points)

The most

b) Are there any similarities between them? If there are name at least two and explain the similarities.(4points)

2. Table below contains data for firm A:

a)Fill in the blanks and answer questions b-c.(6.5 points)

(1)

(2)

(3)

(4)

(5)

(6)

$Price

Output Q_X

$Total Revenue

$ Marginal Revenue

$ Total Cost

$ Marginal Cost

$12

100

N/A

$1194

N/A

$12

101

1,202

$12

102

1,213

$12

103

1,225

$12

104

1,239

b) Based on MR and MC analysis, what output level would determine firm A's profit maximizing level of producing good X? __________________

Explain your answer.(2.5 points)

c) At what level of output will firm A produce too many units of X? ______________

Why is that level of output too much?(3 points)

d) Calculate firm A's profit at 104 units of output? _____________

(2 points)

3. Answer the following questions using diagrams for firms A and B below:

(Note: The solid horizontal line "d" represents demand curve).(3 points each)

a. Firm A's profit-maximizing level of output is __________unit Q

b. Firm B'stotalprofit at its profit-maximizing level of output is $__________

c. Firm A'stotalFixed Cost at 100 units of output is $__________

d. Firm B'stotalVariable Cost at 150 units of output is $_____________

4. Use the graph of a monopoly firm A below to answer questions a-g.(2 points each)

a)Explain why 17 units of Q is considered firm A's profit maximizing level of output?

b)What is the maximum price firm A can charge if it produced 12 units of output? $________.

c)Firm A's total revenue at 17 units of output is $_________.

d)Firm A's total cost at 17 units of output is $________.

e)Firm A's total profit at 17 units of output $____________.

f)At 17 units of output firm A would make aneconomic profit/a normal profit/a loss.

g)Firm A'sper unitprofit at 12 units of output is equal to $________.