Homework Answers
1. B. Both suspects testify.
(Given that Captain Cold choose to testify, Lex Luther's best
response is to testify (16 years in jail).
Given that Captain Cold choose to keep quiet, Lex Luther's best
response is to testify (goes free).
Given that Lex Luther choose to testify, Captain Cold's best
response is to testify (16 years in jail).
Given that Lex Luther choose to keep quiet, Captain Cold's best
response is to testify (goes free).
So, the Nash equilibrium is for both to testify as their best
response occur simultaneously when they both testify.)
2. D. The profit of an individual firm stays at zero in the long
run.
(As the market is competitive, so profit of firms is zero in the
long run.)
3. B. 3 workers
(We can see that Marginal product starts declining after 3rd
worker.)
Add Answer to:
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A The profnt of an individual firm increases from a smaller positive value to a larger positive value in the long run.
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Consider the following two graphs for a product produced in a perfectly competitive market (think, for...
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TRUE OR FALSE TF DO 1. In a price-taker market, all firms produce an identical product...
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It's pretty much just that pages discussing the graphs and explaining their meaning. would you like...
It's pretty much just that pages discussing the graphs and
explaining their meaning. would you like to see my notes? They're
pretty similar to the graph. I wrote down my answer but I'm still
pretty confused on it.
1) Consider the figure below. FIGURE 32 Self-Reinforcing Effects and Clustering Total cost labor cos Prop cost Number of firms in cluster Profit of fimm cincter Imagine that there is a $3 per unit fall in labor costs show that change on...
Consider a competitive market for a consumer product. Suppose this product goes out of fashion with consumers. How will this sudden drop in popularity affect the profit of an individual firm in this market in the long run? Choose one:
A The profnt of an individual firm increases from a smaller positive value to a larger positive value in the long run.
B. The profht of an individual firm increases from zero to a positive value in...
Consider the following two graphs for a product produced in a perfectly competitive market (think, for example, corn or oats). The graph on top shows the market supply and demand functions for this product. The one at the bottom is the cost curves for a typical firm in the industry producing this product. These cost curves pertain to long run. As you know, in the long run firms can change the amounts of invested capital, new firms can enter the...
TRUE OR FALSE TF DO 1. In a price-taker market, all firms produce an identical product and each firm comprises only a very small portion of the total market. 2. If a price-taker firm wants to sell its output, it must accept the market price, but it can sell as much output as it wishes at that market price. O N 3. For a price-taker firm, its marginal revenue from the sale of an addi- tional unit is generally less...
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1l. If a monopolistically competitive firm is incurring losses, then at the profit-max a price is above the average total cost curve. b. price is below the average total cost curve c. price is equal to marginal revenue. d. price is less than marginal revenue. e. average total cost equals marginal cost. Both competitive and monopolistically competitive firms a. can maximize profit by raising price. b. cannot control or set their own price c. can maximize profit by producing to...
It's pretty much just that pages discussing the graphs and
explaining their meaning. would you like to see my notes? They're
pretty similar to the graph. I wrote down my answer but I'm still
pretty confused on it.
1) Consider the figure below. FIGURE 32 Self-Reinforcing Effects and Clustering Total cost labor cos Prop cost Number of firms in cluster Profit of fimm cincter Imagine that there is a $3 per unit fall in labor costs show that change on...
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