Question
Use the following demand-and-cost information for a profit-maximizing firm, to answer the questions that follow. Price where Q is zero = R2200 P* = R2000
Use the following demand-and-cost information for a profit-maximizing firm, to answer the questions that follow. Price where Q is zero = R2200 P* = R2000 Lerner index = 0.9 AVC at Q* = R750 AFC at Q* = R190 Total Variable Cost at Q* = R30000 Price at allocative efficient output level = R1400 The allocative efficient level of output = 80 units MC where Q is zero = R8 4.1. Assuming profit maximization behavior, calculate each of the following for the firm. Q* =________________ Mark-up =_____________________ MC = R___________________ TFC = R______________________ ATC = R_______________ Profit/loss = R_________________ Consumer surplus =________________ DWL =___________________ 4.2 Calculate each of the following at an allocative efficient level of outcome. Consumer surplus = ______________________ Producer surplus =_____________________ AFC =_________________________
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