So that tit trong So phach danh sach du thi (Do hoi dong (do sinh vien ghi) cham thi ghi) d. not advertise, and if the game is to be repeated many times she should still not advertise. 25. As the number of sellers in an oligopoly becomes very large, a. the quantity of output approaches the socially efficient quantity. b. the price approaches marginal cost. the price effect is diminished. d. All of the above are correct. Section B - Calculating exercises (30 Marks) A monopolist is facing with the demand curve: P (USD) = 500 - Q The firm's cost are: AVC (USD) = 20 + 4 and FC =8000 Where Q is in units. this case? a. Calculate P*, Q* and II when this firm wants to maximize profit. What is the consumers' surplus in b. What are the Lerner Index and Deadweight Loss caused by the firm's decision? c. The government imposes 8$/unit tax on producer. Calculate new P*, (* and II when this firm still wants to maximize profit. d. The government imposes a fixed tax of 1000$. Calculate new P*, Q* and II when this firm still wants to maximize profit. Section C - Short answer questions. You are recommended to apply graphs where applicable. (20 marks) 1. Equilibrium quantity will be ambiguous when market demand increase and market supply decrease. Discuss. 2. When the government regulates a market by using ceiling price, the producer surplus will decrease and consumer surplus will increase. In that case, the society faces a deadweight loss. Discuss. == The End ==