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10.1 Suppose the daily demand curve for flounder at Cape May is given by Q D = 1,600 – 600P

10.1 Suppose the daily demand curve for flounder at Cape May is given by Q D = 1,600 – 600P where Q D is demand in pounds per day and P is price per pound. If fishing boats land 1,000 pounds one day, what will the price be?

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10.1 Suppose the daily demand curve for flounder at Cape May is given by Q D = 1,600 – 600P

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  1. 10.1 Suppose the daily demand curve for flounder at Cape May is given by QD = 1,600 – 600P where QD is demand in pounds per day and P is price per pound. • If fishing boats land 1,000 pounds one day, what will the price be? • If the catch were to fall to 400 pounds, what would the price be? • Suppose the demand for flounder shifts outward to QD = 2,200 – 600P How would your answers to part a and part b change? d. Graph your results.

  2. 10.6 Suppose there are 100 identical firms in the perfectly competitive notecard industry. Each firm has a short-run total cost curve of the form: STC = 1/300 q3 + 0.2q2 + 4q + 10 and marginal cost is given by SMC = .01q2 + .4q + 4 a. Calculate the firm’s short-run supply curve with q (the number of crates of notecards ) as a function of market price (P). b. Calculate the industry supply curve for the 100 firms in this industry. • Suppose market demand is given by Q = -200P + 8,000. What will be the short-run equilibrium price-quantity combination? d. Suppose everyone starts writing more research papers and the new market demand is given by Q = -200P + 10,000. What is the new short-run price-quantity equilibrium? How much profit does each firm make?

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