4. An industry has 50 perfectly competitive firms, which have the cost function c(y) = 100 + 0.25y2. There are 1000 consumers, who each have the utility function u = x + y0.5 and income M=100. The price of x is 10. The goods can be supplied in fractions of units, so please go up to 3 decimals in your answers. a. Find the SR industry supply function. b. If some weird industrial mishap destroys production of y at all firms simultaneously, how much does utility fall for each consumer? c. Find the price of y in the long run (assuming the industrial mishap has disappeared)

4. An industry has 50 perfectly competitive firms, which have the cost function c(y) = 100 + 0.25y2. There are 1000 consumers, who each have the utility function u = x + y0.5 and income M=100. The price of x is 10. The goods can be supplied in fractions of units, so please go up to 3 decimals in your answers. a. Find the SR industry supply function. b. If some weird industrial mishap destroys production of y at all firms simultaneously, how much does utility fall for each consumer? c. Find the price of y in the long run (assuming the industrial mishap has disappeared)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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