Microeconomics help please!

If someone colud help with these questions I would be very greatful, Ive been trying for awhile now and Im at my ropes end.

1)The perfectly competitive ice cream industry is assumed to be in long-run equilibrium. Suppose there is an increase in the market demand for ice cream. Assume in your answers that input prices for all firms in the industry don't change when new firms enter or existing firms leave the industry. In the new LONG-RUN equilibrium compared to the original long-run equilibrium, it will be true that______.

2)The perfectly competitive ice cream industry is assumed to be in long-run equilibrium. Suppose there is an increase in the market demand for ice cream. Assume in your answers that input prices for all firms in the industry don't change when new firms enter or existing firms leave the industry. In the new LONG-RUN equilibrium, it will be true that for the typical firm______.

3)The perfectly competitive ice cream industry is assumed to be in long-run equilibrium. Suppose there is an increase in the market demand for ice cream. Assume in your answers that input prices for all firms in the industry don't change when new firms enter or existing firms leave the industry. In the SHORT-RUN, the new equilibrium will be one in which______.

A simple supply/demand problem.

Start by drawing your supply and demand curves. Then show an increase in demand (demand curves shifts out).

1) Price goes up, quantity goes up.

In the short-run, firms will only have a limited ability to increase output. So, a firm's short-run supply curve is relatively inelastic (i.e., steep). So, with an increase in demand,

3) the price received by the firm goes up, profits go up, and the firm tries to respond by increasing output as best it can.

However, in the longer run, a firm can do a lot of things. In particular, it can expand plant and equipment. So, the long-run supply curve is more elastic (flatter).

2) A firm will increase output by an amount more than the short-run increase.

What are the determinants of elasticity of demand and supply?

Having problems trying to figure these out

Question 4. (50 points)
In an auction in the market for wholesale electricity, producers of electricity submit bids
for each generator that they operate. The bid is the minimum price the operator of the
generator is willing to accept for before it will turn it on to supply power to the electricity
grid. To keep the numbers simple, assume that each generator produces one unit of
electricity. In the table below, we see that the operator of generator G1 has put in a bid
for $3. This means that if the price is $3 or more, generator G1 will be switched on. At a
price of $2.99 or below, it will be switched off.
In a double auction, buyers also submit bids. Again, to keep the numbers simple,
assume that each buyer puts in a bid for one unit of power. In the table below, we see
that buyer B1 has submitted a bid to purchase one unit at $14. This means if the price is
$14 or less it will buy one unit. At a price of $14.01 or more, the buyer won’t take any
(a) You are the Independent System Operator (ISO) in an electricity market. You
have received the bid information in the table below. Clear the market, i.e. pick P, Q,
and Who. (The “Who” answers which generators produce and which buyers get
electricity.) Obtain your answer two ways. First, make a table. Second, plot the
information on a graph. Either use graph paper to make your graph by hand or use Excel.

Generators Bid
(Offer to sell in $ )
Buyers Bid
(Offer to purchase in $)
G1 3 B1 14
G2 10 B2 4
G3 1 B3 10
G4 5 B4 2
G5 12 B5 15
G6 3 B6 2
G7 1 B7 1
G8 12 B8 15
G9 3 B9 1
G10 4 B10 12
(b) Suppose Acme Power owns generators G1 through G5. Suppose Giant Electric owns
generators G6 through G10. Calculate the revenues each receives as a result of the
auction. (This is the quantity each firm sells times the market price). Suppose that the
bids that are submitted equal the true cost to these firms of operating the individual
generators. Calculate the profit (revenue minus costs) that each firm receives as a result
of the auction.
Background for Part (c)
Auctions work very well when there are a large number of different bidders. However, if
there are only a small number of firms making bids, they can be subject to manipulation.
To illustrate this point, we look at how Acme and Giant might try to manipulate things in
the auction above. (There is evidence that something like this actually happened in
Regulators have some idea of the fuel costs for producing electricity out of a
given generator. If Acme were to offer a bid of $1000 for operating G1 when the cost is
known to be around $3, this might attract unwanted attention from regulators. Suppose
instead Acme were to say a generator was down for maintenance, even if there was
nothing wrong with it. Acme might be able to get away with this without attracting
(c) Specifically, suppose Acme and Giant work out the following deal before submitting
bids. Acme says generator G1 is broken, so doesn’t submit a bid for G1. Giant says
generators G6 and G9 are broken. So scratch out G1, G6, G9 in the table above. All
other bids remain the same. Clear the market with both a table and a graph. Calculate
the new price and quantity. Calculate the profit each firm receives as a result of the
manipulation. Do your calculations suggest this manipulation by Acme and Giant is a
good move if they can get away with it?
5. (20 points) Elasticity
(a) Use the information below to calculate an estimate of the short-run price elasticity of
demand for gasoline. Four months of data are reported, but you only need to use two of
them. Think carefully about which ones you should use.
(b) To calculate a price elasticity of demand, we look at the effect of changing price
while holding everything else affecting demand fixed. List two things that you are
holding fixed in your calculation. List two other things that are not being held fixed in
your calculation that could potentially be a problem for your estimate.
Table 5a Gasoline Shipments in the United States, Various Months
of Gallons
per Day)
($ per
Apr-2004 375.7 183.9
Sep-2004 374.5 191.2
Dec-2004 393.7 188.7
Sep-2005 369.8 295.1
Source: U.S. Energy Information Administration
Table 5b Population of the United States
Year Population
2004 293.7
2005 296.4
Source: U.S. Census Bureau

i need to know what differentiation, expectations mean an what are the determinants of supply and demand

  1. 👍 0
  2. 👎 0
  3. 👁 193
  1. Question 18 of 20
    5.0 Points
    On a linear demand curve, demand is ________ at the middle of the demand curve than it is at small quantities.

    A. equally elastic

    B. more elastic

    C. less elastic

    D. impossible to tell

    1. 👍 0
    2. 👎 0
    posted by tg

Respond to this Question

First Name

Your Response

Similar Questions

  1. chemistry - equilibria

    1. A(aq) + B(aq) ¡ê C(aq) + D(aq) Initially, 1 mol of A and 1 mol of B are allowed to react and come to equilibrium. It is found hat there is 0.5 mol of A left at equilibrium. Calculate Kc for the reaction. how do i work out Kc?

    asked by alyx on September 14, 2008
  2. Fermats Little Theorem

    Good morning, Just working through an example but ive gotten stuck and need some help. So find the least residue of 8^123 Mod 61 So 8^60 = 1 (mod 61) 8^120 = (8^60)^2 = 1^2 = 1 (mod 61) 123 = 2*60+3 So 8^2*60+3 = (8^60)^2 x 8^3 =

    asked by Mat on October 15, 2016
  3. matrix, linear transformations

    Morning, Bit confused: I have been given the following: g(x,y)=(4x,6y) h(x,y)=(x+2y,y) k(x,y)=(y,x) and ive got the following matrix for each of them: g={{4,0},{0,6}} h={{1,2},{0,1}} k={{0,1},{1,0}} So ive been asked to prove the

    asked by Anon on February 25, 2017
  4. geog

    ive just finished my geography homework on deforestation of the amazon rainforest in brazil which damon kindly helped me with yesterday i just want to make sure ive put the right answers. this is what ive put.- pastureland cattle

    asked by Charlotte on December 14, 2008
  5. 11th grade u.s. history

    Im doing a project on the 12th amendment but im having a hard time finding the questions ive been working this for like well dis will be my 5th day working on it im not good at finding stuff on the internet anyway i have to find

    asked by A on September 28, 2009
  1. year 7 ict

    please could someone tell what a screenshot is. i need to explain the different sections but ive got no idea where to start. ive looked myself but can`t find anything to help. thanks to anyone who helps me.

    asked by toby on February 13, 2008
  2. English

    What words have ive on the end? Adjectives, nouns, and verbs: http://www.onelook.com/?w=*ive&ls=a =)

    asked by Jody on March 26, 2007
  3. Algebra 2

    my math teacher gives me questions i cant answer. he doesnt explain them and ive never seen this stuff in my life, what should i do

    asked by Johny Appleseed on September 18, 2007
  4. art

    ive got the same homework as Jenna and ive looked on the sites everyone has found but im finding the mona lisa painting hard. upto now ive put Its the 15th century and i am called mona lisa today i am going to be painted by an

    asked by kieron on December 29, 2008
  5. penn foster world history

    see ive passed Foragers,farmers,and Builders (exam 007678) & The Axial Ages And Fitful Transitions (exam 007679) but i failed Contacts,conflicts,and The Crucible (exam 007680), Convergence,divergence,and Global Enlightenments

    asked by Adrianna on October 6, 2011
  6. None of my questions are being answered

    I need serious help for the questions i put on here and no one is helping me? ive tried using different names, subjects and said please and thank you and no one has yet helped me. I'm not impressed by this. Thanks but no thanks

    asked by Jake/cabe/eliza on November 1, 2011

More Similar Questions