micro economics

micro economics

micro econ

11-1
Action Items
•    Write a two to three page paper, address the following:
•                            Describe in your own words the concept of market inefficiency.
•                            Provide an example of market inefficiency.
•                            Answer the following questions for your example in Part b:
â–ª                                                  What are the sources of the market inefficiencies?
â–ª                                                  What are the ways to deal with them?
•                            Answer the question below in your conclusion:
When does it make sense for government to interfere with a pure market outcome?
11-3
1.1: A profit-maximizing firm picks the quantity of output at which________equals ________.
1.3: Arrows up or down: at a firm’s current level of output, marginal revenue exceeds the marginal cost. the firm should ______its output and______ its price.
1.10:Equilibrium? in your city, there are currently
three firms providing oil changes for each firm, there is a fixed cost of $80 per day and a marginal cost of $12 per oil change. each firm currently maximizes its profit by providing 10 oil changes per day
a. for each firm, marginal revenue=$________
b. this is a monopolistically competitive equilibrium of ________ equals $______
2.5: Willingness to pay for Dunkin’Donuts Franchise you operate a Dunkin’Donuts shop under a franchise agreement. you pay a royalty of 6 percent of your sales revenue to the parent company. your profit-maximizing quantity is 10,000 donuts per year, and at this quantity your price is $1.00 and your average cost per donut(inclusing all the opportunity cost of production but not the 6 percent royalty)is $0.44 (related to application 2)