17. Models of inventory systems frequently consider the relationships among a beginning inventory, a production quantity, a demand or sales, and an ending inventory. For a given production period j, let * 2, d, beginning inventory for period j (ending inventory from period j-1 production quantity in period j demand in period j ending inventory for period j a. Write the mathematical relationship or model that shows ending inventory as a function of beginning inventory, production, and demand. b. What constraint should be added if production capacity for period j is given by C, ? e. What constraint should be added if inventory requirements for period j mandate an ending inventory of at least 1;?

Suppose that a company has determined that a 70% experience curve accurately describes the evolution of its production costs for a new line. If the first unit costs $100 to produce, what should the 1,000th unit cost based on the experience curve?

In agricultural economics, a “supply response function” describes how supply of a commodity responds to changes in the price of that commodity.  Year  Seeded Area (hectares)  Harvested Area (hectares)  Average Yield (kg per ha)  Production (tonnes)  Price per Tonne ($/tonne)  1966 1,317,000 1,317,000 1,630 2,150,000 65 1967 1,424,000 1,424,000 1,720 2,449,000 60 1968 1,376,000 1,376,000 1,800 2,477,000 48 1969 1,012,000 1,012,000 1,720 1,742,000 46 1970 567,000 567,000 1,465 830,000 52 1971 1,019,000 1,019,000 1,975 2,014,000 50 1972 1,052,000 1,052,000 1,785 1,878,000 68 1973 1,214,000 1,214,000 1,725 2,095,000 158 1974 1,133,000 1,133,000 1,415 1,605,000 147 1975 1,255,000 1,255,000 1,690 2,123,000 130 1976 1,538,000 1,538,000 1,820 2,803,000 103 1977 1,295,000 1,295,000 2,125 2,749,000 98 1978 1,376,000 1,376,000 2,055 2,831,000 133 1979 1,214,000 1,214,000 1,680 2,041,000 170 1980 1,336,000 1,336,000 1,425 1,905,000 203 1981 1,577,900 1,577,900…

N12. Account

Product A is sold in a perfectly competitive, constant-cost industry. a. Draw a side-by-side graph for product A showing the market in long-run equilibrium with an individual firm earning normal profit. Label each of the following: i. The market's equilibrium price (PE) and quantity (QE) ii. The firm's profit-maximizing quantity (QE) b. How would it affect the quantity demanded if the government imposed a price floor below PE? c. The price of B, a complement for product A, decreases. Illustrate on your graph from part (a) the result of this in the short run. i. Label the new market price (P2) and new market quantity (Q2). ii. Shade completely any profit or loss for the firm. d. The price of B decreased by 10 percent, while the quantity demanded of A changed by 15 percent. What is the cross-price elasticity of A and B? e. What happens to the productive efficiency of the firm in the short run as a result of the change described in part (c)? f. What will happen to the price of A in the…