assuming the usual assumptions in each industry, how would the market supply and demand adjust in...
assuming the usual assumptions in each industry, how would the market supply and demand adjust in the long run, for each?
Homework Answers
In the short run , the demand and the supply are relatively inelastic. This is because they do not have enough time to adjust their demands and supply.
In the long run the demands become more elastic due to the increase in the substitutes , or income etc. The supply also increases in the long run with the increase in productivity . Thus the demand and supply adjust their quantities and prices in long run by themselves
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assuming the usual assumptions in each industry, how would the
market supply and demand adjust in...
Consider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC)
7. Short-run supply and long-run equilibrium Consider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. The following diagram shows the market demand for copper. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (Hint:...
Market Supply and Demand Functions Cost functions for a typical firm in the industry $72 $72...
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Assume that an economy is in long-run macroeconomic equilibrium. All the usual assumptions of the dynamic...
Assume that an economy is in long-run macroeconomic equilibrium. All the usual assumptions of the dynamic demand and supply model Firms and workers expect there to be a decline in the inflation rate in the coming year As a result, the LRAS curve will The SRAS curve will The AD curve will The new long-run equilibrium will be where O A. the new aggregate demand curve intersects the new short-run aggregate supply curve on the onginal long-run aggregate supply curve....
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...
Consider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on
7. Short-run supply and long-run equilibrium Consider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph.The following diagram shows the market demand for copper.Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (Hint:...
4. The supply and demand in a given industry is defined by QD – 6500 –...
4. The supply and demand in a given industry is defined by QD – 6500 – 100P and QS – 1200P respectively. In this industry, the cost function of an efficient firm is C(q) = 722 + 2/200. You can assume that all firms in the industry are efficient and identical) and the industry is operating under perfect competition. (a) Find the market equilibrium (prices and quantities) (b) Determine how much will each firm produce, and the profits for each...
Consider a competitive market in which the market demand for the product is expressed as: P...
Consider a competitive market in which the market demand for the product is expressed as: P = 104 - 0.002Q, and the supply of the product is expressed as: P = 4 + 0.0005Q (make sure to count the zeros correctly). The typical firm in this market has a marginal cost of MC = 4 + 0.8q. a. Determine the equilibrium market price and output. Calculate the consumer surplus and the producer surplus at equilibrium in the industry. b. Determine...
Suppose you are given the following information about a particular industry: Market demand Market supply QD...
Suppose you are given the following information about a particular industry: Market demand Market supply QD = 14400 - 100P QS = 1500P C(a)=673 + 20 MC(q) = 200 Firm total cost function Firm marginal cost function. Assume that all firms are identical and that the market is characterized by perfect competition. Find the equilibrium price, the equilibrium quantity, the output supplied by the firm, and the profit of each firm. The equilibrium price is $ 9. (Enter your response...
5 A sudden rise in the market demand in a competitive industry leads to A short...
5 A sudden rise in the market demand in a competitive industry leads to A short run market equilibrium price higher than the original equilibrium price A short run economic profit Entry of new firms into the market All of the above A sudden decrease in the market demand in a competitive industry leads to losses in the short-run and average profits in the long-run above average profits in the short-run and average profits in the long-run new firms being...
The following diagram shows the market demand for steel Use the orange points (square symbol) to ...
5. Short-run supply and long-run equilibrium Consider the competitive market for steel. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. The following diagram shows the market demand for steel. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (Hint:...
Market Supply and Demand Functions Cost functions for a typical firm in the industry $72 $72 $68 $64 $60 $56 $52 $68 $64 ATC $40 $36 $28 $24 1800 2100 2400 2700 3000 3300 3600 3900 4200 4500 4800 0 2 4 6 8 10 12 14 16 18 20 Consider the file HW6 - Short Run & Long Run. Currently, the equilibrium price of the product is dollars per unit, the equilibrium quantity is units, and there are firms...
Assume that an economy is in long-run macroeconomic equilibrium. All the usual assumptions of the dynamic demand and supply model Firms and workers expect there to be a decline in the inflation rate in the coming year As a result, the LRAS curve will The SRAS curve will The AD curve will The new long-run equilibrium will be where O A. the new aggregate demand curve intersects the new short-run aggregate supply curve on the onginal long-run aggregate supply curve....
4. The supply and demand in a given industry is defined by QD – 6500 – 100P and QS – 1200P respectively. In this industry, the cost function of an efficient firm is C(q) = 722 + 2/200. You can assume that all firms in the industry are efficient and identical) and the industry is operating under perfect competition. (a) Find the market equilibrium (prices and quantities) (b) Determine how much will each firm produce, and the profits for each...
Suppose you are given the following information about a particular industry: Market demand Market supply QD = 14400 - 100P QS = 1500P C(a)=673 + 20 MC(q) = 200 Firm total cost function Firm marginal cost function. Assume that all firms are identical and that the market is characterized by perfect competition. Find the equilibrium price, the equilibrium quantity, the output supplied by the firm, and the profit of each firm. The equilibrium price is $ 9. (Enter your response...
5 A sudden rise in the market demand in a competitive industry leads to A short run market equilibrium price higher than the original equilibrium price A short run economic profit Entry of new firms into the market All of the above A sudden decrease in the market demand in a competitive industry leads to losses in the short-run and average profits in the long-run above average profits in the short-run and average profits in the long-run new firms being...
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