Suppose that a limited supply of coal is available to be extracted and sold over two...
Suppose that a limited supply of coal is available to be extracted and sold over two time periods by a perfectly competitive mining industry. Assume that the demand curves for coal in the two periods are given by P1 =40–2q1 and P2 =40–2q2, where q1 and q2 denote the respective amounts of coal produced in periods 1 and 2, while P1 and P2 stand for price of coal in periods 1 and 2 respectively. The marginal cost of extracting coal is MC = 4 in both time periods. The total amount of coal available, X , is 10 units and the rate of discount is 40% (i.e., r = 0.4).
1. Compute the market equilibrium values of coal production and price in each time period.
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Suppose that a limited supply of coal is available to be
extracted and sold over two...
Suppose coal is only to be extracted over two periods. The inverse demand for coal is...
Suppose coal is only to be extracted over two periods. The inverse demand for coal is estimated to be P = 300 - 2Q, where P is the price of coal and Q is the quantity demanded. The marginal cost of extraction is given by MC = 2Q. These relations do not change from period to period. Assume discount rate r = 0.05. Also assume the total initial stock of coal is S0 = 100 for all parts of this...
Figure 14-5 Suppose a firm operating in a competitive market has the following cost curves: Price...
Figure 14-5 Suppose a firm operating in a competitive market has the following cost curves: Price MC ATC AVC Q1 02 03 04 05 Quantity Refer to Figure 14-5. When market price is P2, a profit-maximizing firm's losses can be represented by the area a. At a market price of P2, the firm earns profits, not losses. b. At a market price of P2 the firm has losses, but the reference points in the figure don't identify the losses. C....
Suppose there are two firms in a market producing differentiated products. Both firms have MC=0. The...
Suppose there are two firms in a market producing differentiated products. Both firms have MC=0. The demand for firm 1 and 2’s products are given by: q1(p1,p2) = 5 - 2p1 + p2 q2(p1,p2) = 5 - 2p2 + p1 a. First, suppose that the two firms compete in prices (i.e. Bertrand). Compute and graph each firm’s best response functions. What is the sign of the slope of the firms’ best-response functions? Are prices strategic substitutes or complements? b. Solve...
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QUESTION 1 1 points Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (1.8,Q-97) and (L·9,Qo1433. Then the marginal product of h worker is a 46 units of output. b. 143 units of output c1 unit of output. d. 59 units of output. 1 points QUESTION 2 Table t Bob's Bulldozers Cost Table Quantity able Margina erage age Average otal...
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Figure 14-5 Suppose a firm operating in a competitive market has the following cost curves: Price MC ATC AVC Q1 02 03 04 05 Quantity Refer to Figure 14-5. When market price is P2, a profit-maximizing firm's losses can be represented by the area a. At a market price of P2, the firm earns profits, not losses. b. At a market price of P2 the firm has losses, but the reference points in the figure don't identify the losses. C....
QUESTION 1 1 points Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (1.8,Q-97) and (L·9,Qo1433. Then the marginal product of h worker is a 46 units of output. b. 143 units of output c1 unit of output. d. 59 units of output. 1 points QUESTION 2 Table t Bob's Bulldozers Cost Table Quantity able Margina erage age Average otal...
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