Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure. Ch. 4. Agglomeration Economies and Equilibrium vs. Efficient Cluster Size. The graph shows the relationship between the number of firms in a cluster (on the x-axis), against the profit per firm (on the yaxis). The curve shows the profit per firm as cluster size varies. Point A shows a single isolated firm, which ears a profit of$T₂T3π1Profit per firmProfit:isolated firm6Number of ferms in a cluster 14 a. Identify the point on the curve that represents the Pareto efficient outcome. What is the Pareto efficient number of firms and profit per firm?b. Identify the point on the curve that represents the Nash equilibrium outcome. What is the equilibrium number of firms and the equilibrium profit per firm?c. In one to two sentences, explain why your answers to parts a & b are different (or why they are the same, if that's the case).For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac)T"

Pareto efficient point refers to the point deviating from which no one can be made better off…

Ch. 4. Agglomeration Economies and Equilibrium vs. Efficient Cluster Size The graph shows the relationship between the number of firms in a cluster (on the x-axis), against the profit per firm (on the y axis). The curve shows the profit per firm as cluster size varies. Point A shows a single isolated firm, which earns a profit of T₂ TT 3 π1 Profit per firm Profit: isolated firm

Ch. 4. Agglomeration Economies and Equilibrium vs. Efficient Cluster Size The graph shows the relationship between the number of firms in a cluster (on the x-axis), against the profit per firm (on the y axis). The curve shows the profit per firm as cluster size varies. Point A shows a single isolated firm, which earns a profit of T₂ TT 3 π1 Profit per firm Profit: isolated firm

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.11P

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Question

Note:-

Do not provide handwritten solution. Maintain accuracy and quality in your answer.

Take care of plagiarism.

Answer completely.

You will get up vote for sure.

Ch. 4. Agglomeration Economies and Equilibrium vs. Efficient Cluster Size. The graph shows the relationship between the number of firms in a cluster (on the x-axis), against the profit per firm (on the y
axis). The curve shows the profit per firm as cluster size varies. Point A shows a single isolated firm, which ears a profit of
$
T₂
T3
π1
Profit per firm
Profit:
isolated firm
6
Number of ferms in a cluster 14

a. Identify the point on the curve that represents the Pareto efficient outcome. What is the Pareto efficient number of firms and profit per firm?
b. Identify the point on the curve that represents the Nash equilibrium outcome. What is the equilibrium number of firms and the equilibrium profit per firm?
c. In one to two sentences, explain why your answers to parts a & b are different (or why they are the same, if that's the case).
For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac)
T
"

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