13 In a Krugman type of autarky environment, one was able to derive two equilibrium conditions. In particular, optimal prices charged by firms can be represented by:E= (1+ vewhere cis consumption per variety and p is the productivity. At the same time. from free-entry, the average revenue being equal to the average cost can by representedby:where L is the total labor supply and f a fixed cost of production.What should happen to the average firm size in this economy when free-trade is allowed with an identical foreign economy?Average firm size doesn't change.Not enough information to answer.Average firm size increases.Average firm size decreases.lo000

In a Krugman type of autarky environment, one was able to derive two equilibrium conditions. In particular, optimal prices charged by firms can be represented by: where els consumption per variety and is the productivity. At the same time, from free-entry, the average revenue being equal to the average cost can by represented by: 8=4+1 where is the total labor supply and f a fixed cost of production. What should happen to the average firm size in this economy when free-trade is allowed with an identical foreign economy? Average firm size doesn't change. Not enough information to answer. Average firm size increases. Average firm size decreases. 10000

In a Krugman type of autarky environment, one was able to derive two equilibrium conditions. In particular, optimal prices charged by firms can be represented by: where els consumption per variety and is the productivity. At the same time, from free-entry, the average revenue being equal to the average cost can by represented by: 8=4+1 where is the total labor supply and f a fixed cost of production. What should happen to the average firm size in this economy when free-trade is allowed with an identical foreign economy? Average firm size doesn't change. Not enough information to answer. Average firm size increases. Average firm size decreases. 10000

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter19: Externalities And Public Goods

Section: Chapter Questions

Problem 19.3P

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Carl and Simon are two pumpkin growers who are the only sellers of pumpkins at the market. The demand function for pumpkins is Q = 16,400 - 400P, where Q is the total number of pumpkins that reach the market and P is the price of pumpkins. Suppose further that each farmer has a constant marginal cost of $1 for each pumpkin produced. Assume that Carl can tell, by looking at Simon's fields, how many pumpkins Simon planted and how many Simon will harvest in the fall. (Suppose that Simon will sell every pumpkin that he produces.) Therefore, Carl sees how many pumpkins Simon is actually going to sell this year. Carl has this information before he makes his own decision about how many to plant. If Simon plants enough pumpkins to yield Qs this year, then Carl knows that the profit maximising amount to produce this year is QCarl = Group of answer choices a. 8,000 - Qs/2. b. 16,400 - 400Qs. c. 16,400 - 800Qs. d. 4,000 - Qs/2. e. 12,000 - Qs
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