OPTION 2: The Cheesiest: Consider a competitive market for cheese, with two producers andfour consumers. Neither firm has any fixed costs. The table shows marginal production costs andmarginal values for various customers.Firm 1 MC Firm 2 MC214684. TRUE or FALSE47105. TRUE or FALSEUnit12341. Sketch the situation using a demand and supply framework.6. TRUE or FALSEMV 110864MV 2122MV 3119752. What quantity of cheese is sold at what price?3. What is the total value of cheese traded. What is the "market value (money exchanged) of cheesetraded? What is the cost of producing said cheese? What is the total surplus generated?MV 44321Consumer surplus value would increase if prices were capped at $4Producer surplus value would increase if a minimum price was set at $10If the world demand is perfectly elastic at $10, then total surplus would increase7. Suppose Firm A and Firm B merge and decide that rather than compete they want to maximizeprofits! They do this by setting price! What price do they charge? What quantity do they sell? Dotheir profits go up? What happens to consumer surplus value? What happens to total surplusgenerally?

A perfectly competitive market is a theoretical economic model that describes an idealized market…

OPTION 2: The Cheesiest: Consider a competitive market for cheese, with two producers and four consumers. Neither firm has any fixed costs. The table shows marginal production costs and marginal values for various customers. Firm 1 MC 2 4 6 8 Firm 2 MC 1 4 7 10 Unit 1 2 3 4 MV 1 10 8 6 4 1. Sketch the situation using a demand and supply framework. MV 2 12 2 MV 3 11 9 7 5 MV 4 4 3 2 1

OPTION 2: The Cheesiest: Consider a competitive market for cheese, with two producers and four consumers. Neither firm has any fixed costs. The table shows marginal production costs and marginal values for various customers. Firm 1 MC 2 4 6 8 Firm 2 MC 1 4 7 10 Unit 1 2 3 4 MV 1 10 8 6 4 1. Sketch the situation using a demand and supply framework. MV 2 12 2 MV 3 11 9 7 5 MV 4 4 3 2 1

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 10PA

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