Managerial Economics

Exercises 2 – solutions

Exercise 1
a) 𝑃∗ = 300; 𝑄 ∗ = 400
b) 𝐶𝑆 ∗ = 20,000; 𝑃𝑆 ∗ = 40,000
c) 𝑃𝐶 = 325; 𝑃𝑃 = 250; 𝑄𝑡 = 300; 𝐶𝑆𝑡 = 11,250; 𝑃𝑆𝑡 = 22,500; 𝑇 = 22,500;
𝐷𝑊𝐿 = 3,750
d) 𝑃𝑞 = 320; 𝐶𝑆𝑞 = 12,800; 𝑃𝑆𝑞 = 44,800; 𝐷𝑊𝐿 = 2,400

Exercise 2
a) 𝑃∗ = 400; 𝑄 ∗ = 300
b) 𝐶𝑆 ∗ = 15,000; 𝑃𝑆 ∗ = 22,500
c) 𝑃𝐶 = 420; 𝑃𝑃 = 370; 𝑄𝑡 = 240; 𝐶𝑆𝑡 = 9,600; 𝑃𝑆𝑡 = 14,400; 𝑇 = 12,000;
𝐷𝑊𝐿 = 1,500
d) 𝑃𝑞 = 210; 𝐶𝑆𝑞 = 12,150; 𝑃𝑆𝑞 = 24,975; 𝐷𝑊𝐿 = 375

Exercise 3
a) 𝑃∗ = 1,800; 𝑄 ∗ = 800
b) 𝐶𝑆 ∗ = 80,000; 𝑃𝑆 ∗ = 320,000
c) 𝑃𝐶 = 1,840; 𝑃𝑃 = 1,640; 𝑄𝑡 = 640; 𝐶𝑆𝑡 = 51,200; 𝑃𝑆𝑡 = 204,800; 𝑇 = 128,000;
𝐷𝑊𝐿 = 16,000
d) 𝑃𝑞 = 1,850; 𝐶𝑆𝑞 = 45,000; 𝑃𝑆𝑞 = 330,000; 𝐷𝑊𝐿 = 25,000

Exercise 4
a) 𝑃∗ = 200; 𝑄 ∗ = 300
b) 𝐶𝑆 ∗ = 45,000; 𝑃𝑆 ∗ = 15,000
c) 𝑃𝐶 = 260; 𝑃𝑃 = 180; 𝑄𝑡 = 240; 𝐶𝑆𝑡 = 28,800; 𝑃𝑆𝑡 = 9,600; 𝑇 = 19,200;
𝐷𝑊𝐿 = 2,400
d) 𝑃𝑞 = 350; 𝐶𝑆𝑞 = 11,250; 𝑃𝑆𝑞 = 33,750; 𝐷𝑊𝐿 = 15,000