Problem 1: Consider a perfectly competitive industry composed of N identical firms in the short run. The firm produces output, q, using labor (L) and capital (K): q=√LK In the short run, each firm's capital is fixed at one unit. Each unit of labor and capital cost w and r respectively. The industry demand curve is given by: P=a-Q, a>0 1. Find the short run equilibrium price, firm output, and industry output. 2. How will the short run equilibrium price and outputs vary with a change in the wage rate, w? Explain your answer. 3. How will the short run equilibrium price and outputs vary with a change in the rental rate, r? Explain your answer.
Q: Modern economic Policies and Institutions in China.
A: ***Since the student has posted multiple questions, the expert is required to solve only the first…
Q: WTP
A: Environmental goods refer to the various products and services provided by the environment that…
Q: Assume economic growth is weak, reserves are abundant, and the inflation rate has been below the…
A: Monetary policy refers to the set of actions and measures taken by a country's central bank or…
Q: 1) When the Price is $4 the quantity supplied of hats is 100. If the price changes to $6 dollars and…
A: Since you have posted two independent questions, according to the guidelines, only the first…
Q: A village is located next to 1000 acres of prime grazing land. The village presently owns the land…
A: The tragedy of the commons is the concept in economics that states the problem of social cost that…
Q: If a bank has $200 million in reserves to support $1000 million in deposits and excess reserves are…
A: The percentage of funds that commercial banks must retain in reserves as mandated by regulatory…
Q: (Figure: Understanding Expectation Theories) Assume the economy is at point c. According to the…
A: Adaptive expections are only based on the past rates of the activity. For example, if people have to…
Q: June 1960, the price of gasoline in the Midwest was $0.169 per gallon and the CPI was 29 6 with a…
A: Step 1: Conceptual IntroductionThe Consumer Price Index (CPI) measures the average change in prices…
Q: Draw figures that show your indifference curves for the following pairs of goods. For each pair, are…
A: “Since you have posted a question with multiple sub-parts, we will provide the solution only to the…
Q: Zuma ("Z") High price High price "T" earns $3 million Wide Awake ("W") Low "Z earns price $4 million…
A: In an oligopoly, firms must carefully consider their strategies in response to competitors' actions.…
Q: 5. Consider a firm that produces a product with the following Cost Curves. The cost curves include…
A: AVC curve is the average variable cost curve, it represents the average cost which is incurred…
Q: Suppose the world price of aluminum falls significantly. The demand for labor among…
A: A person is said to be frictionally unemployed when he/she is looking for his/her first job, or…
Q: 7. A firm faces a demand curve Q-9 - P, where P is price. The firm has total cost TC=3Q. If this…
A: The point where the second derivative of the profit function is positive is the maximum quantity,…
Q: Consider the market for Pets Life dog food. If both consumers and producers in the market expect the…
A: Producers make or produce products and provide services. For example, a florist is a producer who…
Q: 16. Lloyd is a monopolist with constant marginal costs. Market demand is given by D(p) = 200p². If…
A: The price that maximizes profits in a monopoly with a constant marginal cost of m is p1. It must…
Q: Figure: Producer Surplus P $3 2 1 $5 $10 10 What is the change in producer surplus if the price…
A: Producer surplus refers to the total amount that a producer gains from producing and selling a…
Q: Price Level a 0 ASLR2 ASLR1 Q₂ Q₁ Real Domestic Output AD₁ AD₂ Refer to the diagram. A decline of…
A: The correct option is: real-business-cycle view of Contraction.
Q: A determinant of the demand for labor is the: O a. quantity of labor supplied. Ob.price of labor.…
A: The demand for labor in economics is influenced by several factors. To identify which of these is a…
Q: Refer to Figure 15-22. Based upon the information shown, what is the deadweight loss created by…
A: One seller or manufacturer controls the entire market in a monopoly. In a monopoly, the supply and…
Q: Use the figure to answer to answer the following 4 questions. $ 16 14 12 10 00 8 6 4 2 10 ՋՈ 120 MR…
A: Note: Since you have posted a question with multiple sub-parts, we will provide the solution only to…
Q: 3. Suppose a software monopolist faces two markets for its software, students and professionals. The…
A: A monopoly refers to a market structure in which a single seller or producer dominates the entire…
Q: $ 90 70 40 30 $50. $30. $60. 50 O $40. MC 100 Figure 8.3 shows a firm's marginal cost, average total…
A: Cost curves are the curves that represents various kinds of costs. The total cost curve represents…
Q: (Figure: Monopsony Employment I) The deadweight loss associated with the monopsony equals: Wage 100…
A: Monopsony refers to the market where only a single buyer exists in the entire market. In this, the…
Q: The area under the demand curve but above the equilibrium price is called: a) consumer surplus.…
A: A demand curve is a graphical illustration that represents the relationship between the price of a…
Q: Which of the following is not related to overall market variability. A•Financial risk B•Interest…
A: Market variability, also known as market volatility, refers to the frequency and magnitude of…
Q: 2. Alternative explanations of wage disparities Suppose that a professor of labor economics finds…
A: The wage differential refers to the difference between the wage rate of two individuals doing the…
Q: explain the trends in CPI projections and real GDP of 2022-2023 in canada
A: The GDP is an indicator of a nation's economic production during a given time frame, often one year.…
Q: Consider a situation in which there are just two countries: an Origin, and a Destination country.…
A:
Q: The cost of maintaining a public monument in Washington, D.C. occurs as periodic outlays of $10,000…
A: Capitalized cost is the present value of a constant annual cost over an infinite analysis period.…
Q: An organization monopolizes the market for maple syrup in order to substantially increase the price…
A: A production possibility curve (PPC) represents the maximum combination of goods that can be…
Q: From 2015-2019, the Austrian accommodation and food services industries have grown in real terms by…
A: It is given that from 2015-2019, the Austrian accommodation and food services industries have grown…
Q: The tables to the right give price-demand and price-supply data for the sale of soybeans at a grain…
A: Equilibrium in supply and demand describes a situation where the quantity of a good or service that…
Q: When a tax of $1.00 per gallon is imposed on sellers of gasoline, the supply curve for gasoline…
A: This can be described as a concept that shows the contribution of an individual, organisation or any…
Q: The sub-discipline of economics that deals with discrimination in professional sports is O health…
A: Economics is the study of individual choices. It includes the production, distribution, and…
Q: The above figure shows the U.S. market for flip-flops. With international trade, the equilibrium…
A: When the quantity demanded in the domestic country exceed the quantity supplied in the domestic…
Q: In the below table, marginal utility first diminishes at the 4th bag. Chip Consumption 0 1st Bag 2nd…
A: The image's statement pertains to the notion of marginal utility, which is the additional…
Q: Explain why relying heavily on a single commodity like oil makes the economy vulnerable to global…
A: Relying significantly on a single commodity, such as oil, as a cornerstone of an economy might…
Q: Problem 3: Consider a pure exchange economy with two consumers (A and B) and two goods (X and Y).…
A: A pure exchange economy is where there is no production and all individuals are endowed with one or…
Q: The provided table furnishes details on price, quantity, and average total cost for a monopoly. To…
A: ATC stands for Average Total Cost. The average total cost is calculated by dividing the total cost…
Q: Run the Multiple Linear Regression using Fatalities as the dependent variable and Licensed drivers,…
A: The multiple linear regression model is the model used in economics, to understand the relationship…
Q: According to the Taylor rule, if the current inflation rate is 5 percent and the current…
A: The Taylor Rule is a guideline for central banks to set interest rates based on economic conditions.…
Q: 1. (Cornelius and David) Which of the following statements is true? a. Cornelius' opportunity cost…
A: “Since you have posted multiple questions, we will provide the solution only to the first question…
Q: You're an economist with the U.S. Treasury. If the real interest rate is 4%, the output gap is Real…
A: The interest rate and economic growth hold an inverse relationship. The rise in the interest rate…
Q: A cartel is an example of: OA) price extortion. OB) price leadership. O C) overt collusion. O D)…
A: A cartel is a formal organization of producers of a commodity to co-ordinate the policies of the…
Q: Of the four choices below, which causes a shift in the Supply of dollars to the right? A. An…
A: The objective of the question is to identify which of the given scenarios would cause a shift in the…
Q: If the attendance at a baseball game is to be predicted by the equation Attendance = 16,500-75…
A: Determine the correlation between the temperature and ball game attendance by using regression…
Q: True or False: Without engaging in international trade, Candonia and Sylvania would have been able…
A: Comparative advantage is a critical concept in economics and a cornerstone of the idea that…
Q: Someone who pays $800 to fly from one city to another instead of paying only $100 for a bus trip…
A: Utility maximization occurs when the Total Utility (TU) derived from consuming a good or service is…
Q: A decrease in the price of foreign oil will affect the U.S. economy by O a. decreasing aggregate…
A: Aggregate Demand (AD): Aggregate demand represents the total quantity of goods and services that all…
Q: Refer to the following table. What was the approximate output gap in 1971? Potential GDP Real GDP…
A: The GDP is an indicator of a nation's economic production during a given time frame, often one year.…
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 13 images
- A firm in a perfectly competitive industry has patented a newprocess for making widgets. The new process lowers the firm’saverage cost, meaning that this firm alone (although still aprice taker) can earn real economic profits in the long run. a. If the market price is $20 per widget and the firm’s marginalcost is given by MC=0.4q , where q is the dailywidget production for the firm, how many widgets willthe firm produce? b. Suppose a government study has found that the firm’snew process is polluting the air and estimates the socialmarginal cost of widget production by this firm to be. If the market price is still $20, what is thesocially optimal level of production for the firm? Whatshould be the rate of a government-imposed excise tax tobring about this optimal level of production? c. Graph your results.A perfectly competitive industry is in long-run equilibrium. Each of the identical firms has a long- run cost function C = 100 + q². As a result, a firm's marginal cost function is MC = 2q. In the long-run competitive equilibrium, (a) How much does the firm produce? (b) What is the equilibrium price? (c) If the market quantity demanded at the equilibrium price is Q = 2500, how many firms are in the market?Each of the 8 firms in a competitive market has a cost function of C=5+q?. The market demand function is Q = 120 - p. Determine the equilibrium price, quantity per firm, and market quantity. The equilibrium price is $|: (Enter your response as a whole number.) The quantity per firm is q = units. (Enter your response as a whole number.) The market quantity is Q= units. (Enter your response as a whole number.) Enter your answer in each of the answer boxes.
- Each firm in a competitive market has a cost function of C= 10g - 49² +g°. There are an unlimited number of potential firms in this market. The market demand function is Q= 34 -D. Determine the long-run equilibrium price, quantity per firm, market quantity, and number of firms. The long-run equilibrium price is $ (Enter your response as a whole number.) DEC 13 O tv MacBook Air 80 DII esc F1 F2 F3 F4 F5 F6 F7 FB @ $ % & 1 2 3 4 7 8. Q W Y tab S J caps lock C M. control option command つ エ > *: レConsider a perfectly competitive market with the market demand functionQd = 1000 − 10pThere are many small, identical firms in the market. Each firm has the marginal cost function:MC = 10 + 10qand the average total cost function:ATC = 45/q + 10 + 5q(a) Suppose the equilibrium price is currently 30 (in the short run). Determine the quantity sold by eachfirm, the market equilibrium quantity, and the number of firms there must be in the market. Hint: Onceyou know the market quantity and quantity per firm, you can back out the number of firms.(b) If entry and exit is possible in the long run, determine long-run equilibrium price, quantity sold by eachfirm, the market equilibrium quantity, and the number of firms there will beConsider the market for solar power. Assume the market is perfectly competitive and initially in long-run equilibrium; solar power sells for $.25 per kwh (kilowatt hour, a unit of power). Draw 2graphs, one to represent the market (supply and demand), and one to represent a single firm (demand, marginal cost, and average cost curves). Assume a u-shaped average cost. Show the equilibrium price and the quantity produced by the market (Q) and by each individual firm (q). Next, to encourage conservation, Congress taxes all forms of energy EXCEPT solar power, causing an increase in the demand for solar. Show what happens to the market and the firm in the short run; indicate clearly what happens to price, quantity, and profit. What happens to the market and the firm in the long run? Indicate clearly what happens to price, quantity, and profit, for each the market and the firm.
- Suppose that each firm in a competitive industry has the following costs: Totalcost:TC=50+1/2q2 Marginalcost:MC=q where q is an individual firm's quantity produced. The market demand curve for this product is Demand:QD=120−P where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market.1. Give the equation for the market supply curve for the short run in which the number of firms is fixed.2. What is the equilibrium price and quantity for this market in the short run?3. In this equilibrium, how much does each firm produce? Calculate each firm's profit or loss. Is there incentive for firms to enter or exit?4. In the long run with free entry and exit, what is the equilibrium price and quantity in this market?5. In this long-run equilibrium, how much does each firm produce? How many firms are in themarket?Suppose that each firm in a competitive industry has the following costs: Totalcost:TC=50+1/2q2 Marginalcost:MC=q where q is an individual firm's quantity produced. The market demand curve for this product is Demand:QD=120−P where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market.a. What is each firm's fixed cost? What is its variable cost? Give the equation for average total cost.b. Graph average-total-cost curve and the marginal-cost curve for qfrom 5 to 15. Atwhat quantity is average-total-cost curve at its minimum? What is marginal cost and averagetotal cost at that quantity?c. Give the equation for each firm's supply curve.d. Give the equation for the market supply curve for the short run in which the number of firms is fixed.e. What is the equilibrium price and quantity for this market in the short run?f. In this equilibrium, how much does each firm produce? Calculate each firm's profit or loss. Is there incentive for firms to…Suppose that each firm in a competitive industry has the following costs: Total cost: TC= 50 + 0.5Q^2The market demand curve for this product is: Qd= 120 − PThere are 9 firms in the market.e) What is the equilibrium price and quantity for this market in the short run? In this equilibrium, how much does each firm produce? Calculate each firm’s profit.f) In the long run with free entry and exit, what is the equilibrium price and quantity in thid market. Is there incentive for firms to enter or exit? h) In this long-run equilibrium, how much does each firm produce? How many firms are in the market?
- Each of the 8 firms in a competitive market has a cost function of C= 5+q?. The market demand function is Q = 120 - p. Determine the equilibrium price, quantity per firm, and market quantity. The equilibrium price is $ (Enter your response as a whole number.) The quantity per firm is q= units. (Enter your response as a whole number.) The market quantity is Q = units. (Enter your response as a whole number.)Each firm in a competitive market has a cost function of: C= 49 + q?. so its marginal cost function is MC = 2q. The market demand function is Q = 56 -p. Determine the long-run equilibrium price, quantity per firm, market quantity, and number of firms. The output per firm is. (round your answer to the nearest integer) The long-run equilibrium number of firms is (round your answer to the nearest integer) The long-run equilibrium price is $. (round your answer to the nearest penny)Consider the following cost curves faced by each firm: TC = 60 +0.5q and MC = q, where q is the individual output for each firm in a perfectly competitive market. Assume the market demand is described by theequation: Q = 100 - 2P where Q is the market output in 100s of units. Currently, the market price is $10. What would one expect to happen in this market in the long run? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. Forko In the long run, firms will either enter or exit the market. a b. In the long run, firms will enter the market. In the long run, firms will exit the market. In the long run, firms will neither enter nor exit the market.