Πέμπτη 9 Σεπτεμβρίου 2010

ΘΕΜΑΤΑ ΜΙΚΡΟΟΙΚΟΝΟΜΙΑΣ ΓΙΑ ΑΓΓΛΙΚΑ ΠΑΝΕΠΙΣΤΗΜΙΑ

Question 1
Market Structure, Monopoly and Price Discrimination (Ch. 5)

A satellite company broadcasts TV services to subscribers in Athens (A) and Thessaloniki (T). Assume that this is the only satellite company that operates in both markets (i.e., monopolist). The demand functions for each one of these two groups of people are: and where is in thousands of subscribers per year and P is the subscription price per year. The cost of providing Q units of broadcasting services is given by , with .

1. What are the profit-maximizing prices and quantities for Athens and Thessaloniki markets?
2. As a result of new satellite law the company can only charge a single price in both markets. What price should he charge and what quantities will he sell in Athens and Thessaloniki?
3. In which of the two situations, (1) or (2), the satellite company is better off? In terms of consumer surplus, which situation do people in Athens prefer and which do people in Thessaloniki?

Question 2 (25%)

Decision Making under Uncertainty (Ch. 1)

A firm is making its production plans for next quarter, but the manager of the firm does not know what the price of the product will be next month. He believes that there is a 40 percent probability the price will be 15 Euros and 60 percent probability the price will be 20 Euros. The manager must decide whether to produce 7,000 units or 8,000 units of output. The following table shows the four possible profit outcomes, depending on which output management chooses and which price actually occurs:

Profits when price is:
15€ 20€
Option A: 7,000 units -3,750 31,770
Option B: 8,000 units -8,000 34,000

1. If the manager chooses the option with the higher expected profits, which output is chosen?
2. Which option is more risky?
Question 3 (25%)
Market Structure, Nash Equilibrium, Consumer Surplus (Ch. 5)

Suppose that the inverse market demand function of a good is and that its production is costless. Determine the equilibrium price, quantity and profit for both the individual firm and the industry as a whole:
1. Under monopoly. Draw the relevant diagram and explain.
2. Under Cournot duopoly. Draw the relevant diagram and explain. Compare yours results to those from (1).
3. What do you think will happen if the number of firms in the industry becomes very large? Discuss the implications for the equilibrium price, industry profits and consumer welfare.

Question 2
Cost curves, Demand and Supply, Price mechanism, Market Structure (Ch. 3, 4, 5)
Consider a perfectly competitive homogenous good industry in which the demand of the good is given by P=100-Q, where Q is the total quantity of the good produced and p is its price. There is a large number of small, price-taking firms that have access to the best available current technology, which is described by the following total cost function,

where q is the quantity of the good produced by an individual firm.

1. Suppose that there are 15 active firms in the industry. Determine the individual firm’s supply function as well as the industry’s supply function. What will be the price of the good in equilibrium? How much output each firm produces and what are the profits of each firm in the short-run industry equilibrium?
2. Explain why the situation described in (1) cannot be equilibrium whenever there is free entry and exit in the industry. Find the long-run industry equilibrium i.e. find the number of firms that enter in the industry, the output and the profits of each entering firm, and the price of the good.

ΓΙΑ ΤΙΣ ΛΥΣΕΙΣ ΜΠΟΡΕΙΤΕ ΝΑ ΜΑΣ ΚΑΛΕΣΕΤΕ ΣΤΟ 6983652374

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