4. For production functions i) q = K0.25L0.25, %3D ii) q = K0.5Lº.5. iii) q = KL a) Assume w= $20 and v = $20, what are the long-run MC and AC equations? b) Tun the MC functions into firmlong-run supply equations. c) Graph the MC and AC functions. Assume that the price of output is $20, explain how the q = q(p = $20) might or might not be a profit-maximizing outcome and whether the

4. For production functions i) q = K0.25L0.25, %3D ii) q = K0.5Lº.5. iii) q = KL a) Assume w= $20 and v = $20, what are the long-run MC and AC equations? b) Tun the MC functions into firmlong-run supply equations. c) Graph the MC and AC functions. Assume that the price of output is $20, explain how the q = q(p = $20) might or might not be a profit-maximizing outcome and whether the

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3. Consider a firm that produces a single output Q using two inputs, q₁ and production technology is the Cobb-Douglas: Q = 9tq². 2 - Let pi be the price of q1, and p2 be the price of q2. Assume that the price of the output Q is 1. (b) Find the effect of an input price p2 change on the optimal quantity, q2, of the input good 2 using the implicit function theorem.
On the graph input tool, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 6, 12, 15, 18, 24, and 30 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green points (triangle symbol) to plot the results. Calculate the total revenue if the firm produces 6 versus 5 units. Then, calculate the marginal revenue of the sixth unit produced. The marginal revenue of the sixth unit produced is________. Calculate the total revenue if the firm produces 12 versus 11 units. Then, calculate the marginal revenue of the 12th unit produced. The marginal revenue of the 12th unit produced is_________.
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The Unique Gifts catalog lists a "super loud and vibrating alarm clock." Their records indicate the following information on the relation of monthly supply and demand quantities to the price of the clock. Supply 133 183 Demand 168 148 Use this information to find the following. (a) points on the demand linear equation (x, p) = ( 148,44 (x, p) = 168,32 (x, p) = points on the supply linear equation (x, p) = (183,44 (133,32 Price $32 $44 (b) the demand equation p P = (smaller x-value) ) (larger x-value) (c) the supply equation p p= (smaller x-value) (larger x-value) (d) the equilibrium quantity and price Equilibrium occurs when the price of the clock is $ and the quantity is
On the following graph, use the orange points (square symbol) to plot points along the portion of the firm's short-run supply curve that corresponds to prices where there is positive output. (Note: You are given more points to plot than you need.)
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qD = 100 – 0.5p, qS = 2p – 20 What is the price elasticity of supply? Is the situation modeled here more likely to be reflecting a short- or long-run equilibrium? Why?
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