Question

1. NAME and LABEL each curve S/cu. ft a. answer: marginal cost curve for water MCsater S10/cubic foot b. C. d. 2 Determine the following and EXPLAIN WHY; S5/cubic foot a equilibrium quantity of water the fim will sell -100m cu.ft because on that unit of water sold (100mth cn.ft.) MR MC b. equilibrium price the firm will charge for water because: c. total revenue earned by the firm at equilibrium because: quantity of water, d. total costs to the firm suppling water 80 million 160 million (in cubic feet/year) becanse: ecomomil profit becanse: f. dead weight loss to society at firm's equilibrium- because: 3. determine the following, if the government chooses to Regulate the PRICE the firm is allowed to charge a. If the government's goal is to eliminate economic profits and uses an AC pricing scheme to fix the price of water, determine 1. the price the government would allow firm to charge- 2. the quantity of water the firm would choose to sell at that price b. If the government's goal is to eliminate "dead weight loss" abd uses an MC pricing scheme to fix the price of water, determine: 1. the price the government would allow the firm to charge- 2. the equilibrium quantity of water the firm would cheose to sell at that price 5, DRAW a newW ATC curve such that this monopoly firm would be destined to make an economic loss and hence unless the Government subsidizes the firm by offsetting the firm's losses with taxes collected from the taxpayers 6. DRAW a new MC curve, if an increase in the wages paid to labor causes the firm's Marginal costs to rise by S2/cubic feet. Then using the new MC curve and orginial Demand Curve to determine the following: (remember MCwar wages paid to labor ) Marginal Product bbe a the new equilibrium quantity of water produced by the firm b. the new equilibrium price charged by the firm to buyers of water- c If you compare the price charged in question 2, with the priee charged in question 6, you should notice the rise in price did not equal the if you compare the pri Explain why c. 7. write a phrase that Describes the following: HINT: the phrase has to be an if, then statement a. a movement along the ATC curve (average total cost curve): if the firm produces a larger quantity of water, then b. a movement along the MR curve (Marginal Revenue curve): if the firm lowers the price of water to sell more water, then