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(3) Sebastian runs a jazz venue and hires bartenders (x) and musicians (y) to serve its...
for context: Problem 1 Consider the production function + (e) Plot the long-run and short-run marginal...
for context:
Problem 1 Consider the production function + (e) Plot the long-run and short-run marginal cost curves. (f) At the point at which they intersect, is the long-run supply curve or the short-run supply curve more elastic? Problem 1 Consider the production function + (a) Assume for parts (a)-(d) that we are in the long run. Suppose the factor prices are wi = wy = 1. Show that the cost function is equal to (b) Suppose the market price...
1. [30 POINTS] Consider the production function y=f(L,K) = 4/1/2K1/4 where L is labor and K...
1. [30 POINTS] Consider the production function y=f(L,K) = 4/1/2K1/4 where L is labor and K is capital. Price per unit of the labor is w, price per unit of the capital is r, and the price per unit of the output is p. (a) (10 POINTS] In long-run, if the firm's objective is to maximize its profit, what are the factor demand functions of labor and capital? (b) (10 Points) What is the optimal output level y and the...
A firm has a production function Y = 2 Ko5L05 use w to denote the wage...
A firm has a production function Y = 2 Ko5L05 use w to denote the wage rate and r to denote the capital rental price. Let us first consider the short run situation, where the firm has K = 25 and r = 2. In order to produce 10 units of output, how many units of labour does the firm need to hire? What is the average cost of the firm? a. b. Let us first consider the short run...
A firm has a production function Y 2 K05L05. Use w to denote the wage rate...
A firm has a production function Y 2 K05L05. Use w to denote the wage rate and r to denote the capital rental price Let us first consider the short run situation, where the firm has K = 25 and In order to produce 10 units of output, how many units of labour does the firm need to hire? What is the average cost of the firm? Let us first consider the short run situation, where the firm has K-25....
Exercise 1. Short-Run Industry Supply Curve In a perfectly competitive market there are n firms with...
Exercise 1. Short-Run Industry Supply Curve In a perfectly competitive market there are n firms with identical technology: yi=Li½Ki½. Each firm’s cost function is Ci=wLi+rKi where w=r=1. a) In the short run all firms have a fixed level of Ki=100, so that yi=10Li½ and Ci=Li+100. What is the cost function Ci(yi)? What is the short-run average cost function ACi(yi)? b) What is each firm’s marginal cost function MCi(yi)? What is each firm’s short-run supply function si(p)? Find the inverse of...
36.Assume a store sells good X and good Y. When the price of X was reduced...
36.Assume a store sells good X and good Y. When the price of X was reduced from $18.00 to $10.00, the quantity of Y sold increased from 80 to 100. (a) Calculate the cross price elasticity of demand of X and Y. (b). Are the two goods substitute goods or complementary goods? Explain. (c). What does the coefficient of elasticity indicate? 37. Assume the following demand and supply equations: Qd: 182 - 50p Qs: 22 + 30p (a). Calculate the...
Question No. 3 (25pts.) The market for wheat consists of 500 identical firms, each with a...
Question No. 3 (25pts.) The market for wheat consists of 500 identical firms, each with a total cost function given as: TC = 90,000 + 0.0000 1Q2 where Q is measured in bushels per year. The market demand curve for wheat is: Q = 90,000,000-20,000,OOOP where P is the price per bushel. A. Determine the short-run equilibrium price and quantity that would exist in the market. Calculate the profit maximizing quantity for the individual firm. Calculate the firm's short-run profit...
This is an Industrial Organization Economics Question: Suppose that demand for rollerblades is given by D(p)...
This is an Industrial Organization Economics Question: Suppose that demand for rollerblades is given by D(p) = A − p. The cost function for all firms is C(y) = wy2 + f , where f is a fixed set-up cost. The marginal cost of production is MC(y) = 2wy. Assume that the industry is perfectly competitive. (a) Find a competitive firm’s supply function. If there are n firms in the industry, what is industry supply? (b) If there are n...
Only question b and f need aid Question B1 Where x is an output produced using...
Only question b and f need aid
Question B1 Where x is an output produced using inputs labour (l) and capital (k) a) Do the following production functions exhibit decreasing, constant, or increasing returns to scale? Explain your answers (2 marks each) - x = 5070.3k0.3 x = 2020.45 k0.55 x = 570.610k0.6 Suppose our price-taking and wage-taking firm can produce a single output x using inputs labour (l) and capital (k) according to the production function: x = f(1,k)...
1. Consider the production function y = f(L,K) for a firm in a competitive market setting. The price of the outpu...
1. Consider the production function y = f(L,K) for a firm in a competitive market setting. The price of the output good is p > 0. The prices of the inputs Labour and Capital are w> 0 and r>0 respectively. The firm chooses L and K in order to maximize profits, (L.K). (a) How does the short-run production function differ from the long-run production function? (b) Write out the profit function for the firm, (L,K). (c) Derive the first order...
for context:
Problem 1 Consider the production function + (e) Plot the long-run and short-run marginal cost curves. (f) At the point at which they intersect, is the long-run supply curve or the short-run supply curve more elastic? Problem 1 Consider the production function + (a) Assume for parts (a)-(d) that we are in the long run. Suppose the factor prices are wi = wy = 1. Show that the cost function is equal to (b) Suppose the market price...
1. [30 POINTS] Consider the production function y=f(L,K) = 4/1/2K1/4 where L is labor and K is capital. Price per unit of the labor is w, price per unit of the capital is r, and the price per unit of the output is p. (a) (10 POINTS] In long-run, if the firm's objective is to maximize its profit, what are the factor demand functions of labor and capital? (b) (10 Points) What is the optimal output level y and the...
A firm has a production function Y = 2 Ko5L05 use w to denote the wage rate and r to denote the capital rental price. Let us first consider the short run situation, where the firm has K = 25 and r = 2. In order to produce 10 units of output, how many units of labour does the firm need to hire? What is the average cost of the firm? a. b. Let us first consider the short run...
A firm has a production function Y 2 K05L05. Use w to denote the wage rate and r to denote the capital rental price Let us first consider the short run situation, where the firm has K = 25 and In order to produce 10 units of output, how many units of labour does the firm need to hire? What is the average cost of the firm? Let us first consider the short run situation, where the firm has K-25....
Question No. 3 (25pts.) The market for wheat consists of 500 identical firms, each with a total cost function given as: TC = 90,000 + 0.0000 1Q2 where Q is measured in bushels per year. The market demand curve for wheat is: Q = 90,000,000-20,000,OOOP where P is the price per bushel. A. Determine the short-run equilibrium price and quantity that would exist in the market. Calculate the profit maximizing quantity for the individual firm. Calculate the firm's short-run profit...
Only question b and f need aid
Question B1 Where x is an output produced using inputs labour (l) and capital (k) a) Do the following production functions exhibit decreasing, constant, or increasing returns to scale? Explain your answers (2 marks each) - x = 5070.3k0.3 x = 2020.45 k0.55 x = 570.610k0.6 Suppose our price-taking and wage-taking firm can produce a single output x using inputs labour (l) and capital (k) according to the production function: x = f(1,k)...
1. Consider the production function y = f(L,K) for a firm in a competitive market setting. The price of the output good is p > 0. The prices of the inputs Labour and Capital are w> 0 and r>0 respectively. The firm chooses L and K in order to maximize profits, (L.K). (a) How does the short-run production function differ from the long-run production function? (b) Write out the profit function for the firm, (L,K). (c) Derive the first order...
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