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Problem No.

Quantity
Price TR FC MC VC TVC TC ATC MR Profit / Loss
Demanded
$ 8.00 - - 2,000,000 - - - 2,000,000 x $ (2,000,000.00)
$ 7.00 100,000 700,000 2,000,000 - - - 2,000,000 20 7 $ (1,300,000.00)
$ 6.00 200,000 1,200,000 2,000,000 - - - 2,000,000 10 5 $ (800,000.00)
$ 5.00 300,000 1,500,000 2,000,000 - - - 2,000,000 7 3 $ (500,000.00)
$ 4.00 400,000 1,600,000 2,000,000 - - - 2,000,000 5 1 $ (400,000.00)
$ 3.00 500,000 1,500,000 2,000,000 - - - 2,000,000 4 (1) $ (500,000.00)
$ 2.00 600,000 1,200,000 2,000,000 - - - 2,000,000 3 (3) $ (800,000.00)
$ 1.00 700,000 700,000 2,000,000 - - - 2,000,000 3 (5) $ (1,300,000.00)
$ - 800,000 - 2,000,000 - - - 2,000,000 3 (7) $ (2,000,000.00)

A) the profit-maximizing price will be $4 with 400,000 number of crossing (Demand),


However it won't be efficient as it'll lead to a loss of $ 400K at which is the least loss comparing to the other levels of demand.

B) No the company should not build the bridge if it's seeking profits because it's genrating loss on levels of Demand

C) the government should price it at $ 4 / crossing , as it'll lead to the minimum total economic cost which is 400,000

D) Depends on the unavailable data, like the cost of time & money on people and economy for using current alternative routs
Problem No.6

Quantity
Price TR FC MC VC TVC TC ATC MR Profit / Loss
Demanded
$ 8,000 5,000 $ 40,000,000 - 1,000 1,000 5,000,000 5,000,000 1,000 $ 35,000,000
$ 7,000 6,000 $ 42,000,000 - 1,000 1,000 6,000,000 6,000,000 1,000 2,000 $ 36,000,000
$ 6,000 7,000 $ 42,000,000 - 1,000 1,000 7,000,000 7,000,000 1,000 - $ 35,000,000
$ 5,000 8,000 $ 40,000,000 - 1,000 1,000 8,000,000 8,000,000 1,000 (2,000) $ 32,000,000
$ 4,000 9,000 $ 36,000,000 - 1,000 1,000 9,000,000 9,000,000 1,000 (4,000) $ 27,000,000
$ 3,000 10,000 $ 30,000,000 - 1,000 1,000 10,000,000 10,000,000 1,000 (6,000) $ 20,000,000
$ 2,000 11,000 $ 22,000,000 - 1,000 1,000 11,000,000 11,000,000 1,000 (8,000) $ 11,000,000
$ 1,000 12,000 $ 12,000,000 - 1,000 1,000 12,000,000 12,000,000 1,000 (10,000) $ -

A) Price would be 1000 per diamond & 12000 quantity , where Price = MC
but unfortunetly MR does not equal to (Price & MC)

B) Price would be 7000 & 6000 quantity demanded at which will lead to the maximum profit 36 million

C) If Russia & Souith Africa formed a cartel - Price would be 7000 & 6000 quantity demanded at which will lead to the maximum profit 36 million
If the countries split the market evenly - South Africa Production will be the half of the quantity demanded (3000) & will get half of the Profit (18 million)
If South Africa increased its production by 1000 unit while Russia stuck to the cartel agreement,
Total supply will increase in the market to reach 7000 quantity at which will lead to decrease in price to $6000
thus, South Africa Profit will be( 4000 Quantity * $6000 ) - ( 4000 Quantity * $1000 ) = 20 Million
$ 24,000,000.00 $ 4,000,000.00 $ 20,000,000.00

D) ??

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