2. Consider a profit-maximizing firm with production function, Y-KO-SL0.5, where Y is output, K is units of capital and Lis number of workers. The firm is a price taker in the market for capital and labour with the rental rate on capital, r, and the wage paid to workers, w. The firm is the only seller in the output market, but the risk of entry of new firms means that the firm is a price taker in the output market, and sells at the equilibrium price, p, output equal to the market demand at that price (Yº).

2. Consider a profit-maximizing firm with production function, Y-KO-SL0.5, where Y is output, K is units of capital and Lis number of workers. The firm is a price taker in the market for capital and labour with the rental rate on capital, r, and the wage paid to workers, w. The firm is the only seller in the output market, but the risk of entry of new firms means that the firm is a price taker in the output market, and sells at the equilibrium price, p, output equal to the market demand at that price (Yº).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

The cost function faced by a firm in a perfectly competitive market is the following: ctyedy+10y+25, where y denotes the output level. a. Find the price at which the firm will earn zero profits. b. Also write down the equation of the supply curve of the firm. c Using your answer in part a), comment on the following statement: "At a price of p-2O, the firm will make positive profit", is the statement True or False? Explain For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). R.
Yuri has been offered a job with a weekly wage of $800. Yuri declines the offer and starts a tutoring business of his own. He rents a classroom for $200/week. Additional material costs are $5 per student per one-hour tutorial. Tuition is $30 per student per tutorial (regardless of the size of the tutorial class). 3a) What is the weekly accounting profit function for Yuri's business? 3b) What is the weekly economic profit function for his business? - --- ---- 3c) What is the economic breakeven number of tutorial hours per week?
Assume that Vartoli Saadettin decides to start up a peddler's trade. His bench is in a perfectly competitive market and has the following long-run total cost function: LRTC(q) = 80q – 8q² + q³ Vartoli Saadettin also observes that market demand is given by: Q=12500-50P. Note that Q represents the market quantity, including all the other firms in the market. a) Derive the marginal cost and average cost functions for Vartoli Saadetin. b) Calculate the long-run equilibrium quantity to produce for Vartoli Saadetin. c) Calculate the long-run equilibrium price and the number of firms in the market.
Figure A Competitive Firm1.2 MC ATC AVC Given Pl =$7.00 P2 $8.50 P3 =$9.20 QI=100.00 A P3 B P2 P1 MR Quantity Q1 Refer to Figure A Competitive Firm1.2. At an output level of Q1, the average fixed cost is about O $0.70 O No answer text provided. O No answer text provided. O S0.80 %24
1 Mario owns a wood-fired pizza shop which imitates traditional Italian methods. She uses a unique sauce that attracts a loyal following of customers. The demand for her pizzas is q = 1650 – 250p, and her costs are TC 0.72+0.0035q. q is the number of pizzas sold per week, TC(q) is Maria's weekly total cost, and p is the price of a pizza. a) What price and output will Maria choose to maximize profits? b) Maria returns to college and asks her cousin Victor to manage her pizza business. Victor faces the same demand and cost conditions as Maria, but he decides to maximize revenue. What price and output should he choose?
choose the right answer: Suppose that wood industry is a perfectly competitive industry that involves 160 identical firms. The production function of each of these identical firms is as follows: 1 1 q = KZLZ where K denotes capital and L denotes labor with the corresponding prices: PK = 10 and P 12. Suppose that capital is fixed K=12 and market %3D demand function is given as follows: QD = 1,600 – 20P %3D What is the economic profit at the equilibrium, respectively? a) economic profit of $64 b) zero economic profit c) exconomic loss $42 economic loss of $56
please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly
M1
O Consider a perfectly competitive market where variable input markets are also perfectly competitive but not all firms have the same fixed cost. a. Draw the two-panel competitive model and derive and explain, via a change in demand, the market long run supply curve. b. Explain the difference between profit and producer surplus, in general. Discuss long run profitability for firms and producer surplus (where it comes from and who gets it) in the situation graphed in part a.
I need an answer of G, H
8.* The profit of a firm depends on its use of a factor x and a parameter a according to f(x, a), increasing in a. The prices of the output and factor are p>0 et w > 0. Does the maximum profit of the firm increase or decrease if a increases? Why?
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working