The sneakers market is perfectly competitive in Country Y. Table 1 shows the demand and supply schedule of the sneakers market in Country Y. Table 1 - Demand and supply schedule of the sneakers market in Country Y Sporty Shoes is one of the firms in the sneakers market in Country Y. Apart from the rent of $10,000, Sporty Shoes has the cost structure as shown in Table 2. (a) Construct ONE new table for Sporty Shoes based on the above data. Besides including the original column of quantity, add columns of total cost, average total cost, and marginal cost of Sporty Shoes. Round your answers to integer, if applicable. No working is required. (Remarks: Significant mark deduction applies if the table is broken into 2 parts /2 tables or if abbreviation is used for the headings.) (3 marks) (b) Determine the price, profit maximizing output and economic profit (loss) of Sporty Shoes. Explain briefly. (5 marks) (a) Construct ONE new table for SportyShoes based on the above data. Besides including the original column of quantity, add columns of total cost, average total cost, and marginal cost of Sporty Shoes. Round your answers to integer, if applicable. No working is required. (Remarks: Significant mark deduction applies if the table is broken into 2 parts / 2 tables or if abbreviation is used for the headings.) (3 marks) (b) Determine the price, profit maximizing output and economic profit (loss) of Sporty Shoes. Explain briefly. (5 marks) Page 3 of 4 (c) Based on the given data and your answer of part (a) and (b), draw a set of market-firm diagram to illustrate the situation of market for sneakers and Sporty Shoes. Label the critical points with figures. Label the area of profit (loss) too. No average variable cost curve and no explanation is required. (6 marks) (d) Recently the general income of citizens dropped by 10% compared to last year. At the same time, the landlord of Sporty Shoes raised the rent dramatically. Consequently, Sporty Shoes has recorded a zero economic profit. (i) Illustrate these changes in the same diagram of part (c). (3 marks) (ii) Use demand-and-supply analysis to explain the effects on the equilibrium price and equilibrium quantity of the sneakers market. How Sporty Shoes is affected by the change of equilibrium price? Explain. (5 marks) The sneakers market is perfectly competitive in Country Y. Table 1 shows the demand and supply schedule of the sneakers market in Country Y. Table 1 - Demand and supply schedule of the sneakers market in Country Y Sporty Shoes is one of the firms in the sneakers market in Country Y. Apart from the rent of $10,000, Sporty Shoes has the cost structure as shown in Table 2. (a) Construct ONE new table for Sporty Shoes based on the above data. Besides including the original column of quantity, add columns of total cost, average total cost, and marginal cost of Sporty Shoes. Round your answers to integer, if applicable. No working is required. (Remarks: Significant mark deduction applies if the table is broken into 2 parts /2 tables or if abbreviation is used for the headings.) (3 marks) (b) Determine the price, profit maximizing output and economic profit (loss) of Sporty Shoes. Explain briefly. (5 marks) (a) Construct ONE new table for SportyShoes based on the above data. Besides including the original column of quantity, add columns of total cost, average total cost, and marginal cost of Sporty Shoes. Round your answers to integer, if applicable. No working is required. (Remarks: Significant mark deduction applies if the table is broken into 2 parts / 2 tables or if abbreviation is used for the headings.) (3 marks) (b) Determine the price, profit maximizing output and economic profit (loss) of Sporty Shoes. Explain briefly. (5 marks) Page 3 of 4 (c) Based on the given data and your answer of part (a) and (b), draw a set of market-firm diagram to illustrate the situation of market for sneakers and Sporty Shoes. Label the critical points with figures. Label the area of profit (loss) too. No average variable cost curve and no explanation is required. (6 marks) (d) Recently the general income of citizens dropped by 10% compared to last year. At the same time, the landlord of Sporty Shoes raised the rent dramatically. Consequently, Sporty Shoes has recorded a zero economic profit. (i) Illustrate these changes in the same diagram of part (c). (3 marks) (ii) Use demand-and-supply analysis to explain the effects on the equilibrium price and equilibrium quantity of the sneakers market. How Sporty Shoes is affected by the change of equilibrium price? Explain
