Market demand is a- Qd = { ²², p = [0, a] 0, p> a a, b >0. There are n competitive firms in the market. For i = (1) 1, n, firm i hires .... l; units of labor at unit cost w > 0, which yields q₁ = 210 units of output. Here, αε (0, 1). 1. Suppose that n = 1. (a) Find firm 1's supply as a function of p. (1 point) (b) Find the competitive equilibrium (p*, q†) for any a € (0, 1). (1 point) (c) Find the competitive equilibrium (p*, q*) for a = 0.5. (0.5 points) 2. Suppose that n = 3 and a = 0.5. Suppose further that firm 1 is given a subsidy on production, i.e., for each unit of output produced by firm 1, the government gives s dollars to firm 1. (a) For i = 1, 2, 3, find firm i's total cost, TCi (qi). (1 point) (b) Find the competitive equilibrium (p*, 91, 92, 93). (1 point) (c) What is the effect of s on (p*, 91, 92, 93)? (0.5 points)
Market demand is a- Qd = { ²², p = [0, a] 0, p> a a, b >0. There are n competitive firms in the market. For i = (1) 1, n, firm i hires .... l; units of labor at unit cost w > 0, which yields q₁ = 210 units of output. Here, αε (0, 1). 1. Suppose that n = 1. (a) Find firm 1's supply as a function of p. (1 point) (b) Find the competitive equilibrium (p*, q†) for any a € (0, 1). (1 point) (c) Find the competitive equilibrium (p*, q*) for a = 0.5. (0.5 points) 2. Suppose that n = 3 and a = 0.5. Suppose further that firm 1 is given a subsidy on production, i.e., for each unit of output produced by firm 1, the government gives s dollars to firm 1. (a) For i = 1, 2, 3, find firm i's total cost, TCi (qi). (1 point) (b) Find the competitive equilibrium (p*, 91, 92, 93). (1 point) (c) What is the effect of s on (p*, 91, 92, 93)? (0.5 points)
Chapter16: Labor Markets
Section: Chapter Questions
Problem 16.7P
Related questions
Question
![Market demand is
a-
Qd = { ²², p = [0, a]
0, p> a
a, b >0. There are n competitive firms in the market. For i
=
(1)
1, n, firm i hires
....
l; units of labor at unit cost w > 0, which yields q₁ = 210 units of output. Here,
αε (0, 1).
1. Suppose that n = 1.
(a) Find firm 1's supply as a function of p. (1 point)
(b) Find the competitive equilibrium (p*, q†) for any a € (0, 1). (1 point)
(c) Find the competitive equilibrium (p*, q*) for a = 0.5. (0.5 points)
2. Suppose that n = 3 and a =
0.5. Suppose further that firm 1 is given a subsidy
on production, i.e., for each unit of output produced by firm 1, the government
gives s dollars to firm 1.
(a) For i
=
1, 2, 3, find firm i's total cost, TCi (qi). (1 point)
(b) Find the competitive equilibrium (p*, 91, 92, 93). (1 point)
(c) What is the effect of s on (p*, 91, 92, 93)? (0.5 points)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff0f04283-db47-4e0d-bbeb-94593ba02663%2Fe13b1225-533a-4846-a951-6e4341fc14e0%2Fmxldp5q_processed.png&w=3840&q=75)
Transcribed Image Text:Market demand is
a-
Qd = { ²², p = [0, a]
0, p> a
a, b >0. There are n competitive firms in the market. For i
=
(1)
1, n, firm i hires
....
l; units of labor at unit cost w > 0, which yields q₁ = 210 units of output. Here,
αε (0, 1).
1. Suppose that n = 1.
(a) Find firm 1's supply as a function of p. (1 point)
(b) Find the competitive equilibrium (p*, q†) for any a € (0, 1). (1 point)
(c) Find the competitive equilibrium (p*, q*) for a = 0.5. (0.5 points)
2. Suppose that n = 3 and a =
0.5. Suppose further that firm 1 is given a subsidy
on production, i.e., for each unit of output produced by firm 1, the government
gives s dollars to firm 1.
(a) For i
=
1, 2, 3, find firm i's total cost, TCi (qi). (1 point)
(b) Find the competitive equilibrium (p*, 91, 92, 93). (1 point)
(c) What is the effect of s on (p*, 91, 92, 93)? (0.5 points)
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