Market demand isa-Qd = { ²², p = [0, a]0, p> aa, 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 subsidyon production, i.e., for each unit of output produced by firm 1, the governmentgives 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)

Given that the firm hires l units of labor at a unit cost w to produce q1 = 210 units, the cost of…

Answered: Market demand is a- Qd = { ²², p = [0,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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