Recall the assumptions: The market for calculators is a perfectly competitive industry facing typical U-shaped ATC, AVC, and MC cost curves. Demand is linear and has a downward slope. The industry is filled with many homogeneous firms. Using a side-by-side graph that depicts both the market (on the left) and a representative firm (on the right), graphically depict what will happen to (a) P (price), (b) Q (market output), (c) q (representative firm's output), and (d) π (representative firm's profit) when the market moves from the original short run equilibrium (SRE) with positive profits you depicted in Question 1 to a new long run equilibrium (LRE).

Recall the assumptions: The market for calculators is a perfectly competitive industry facing typical U-shaped ATC, AVC, and MC cost curves. Demand is linear and has a downward slope. The industry is filled with many homogeneous firms. Using a side-by-side graph that depicts both the market (on the left) and a representative firm (on the right), graphically depict what will happen to (a) P (price), (b) Q (market output), (c) q (representative firm's output), and (d) π (representative firm's profit) when the market moves from the original short run equilibrium (SRE) with positive profits you depicted in Question 1 to a new long run equilibrium (LRE).

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 8EA: Why do managers want a high ROI, and how would they strive to increase their ROI?

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The market for calculators is a perfectly competitive industry facing typical U-shaped ATC, AVC, and MC cost curves. Demand is linear and has a downward slope. The industry is filled with many homogeneous firms. At the time associated with Question 1, firms in the industry are earning positive economic profits. Using a side-by-side graph that depicts both the market (on the left) and a representative firm (on the right), graphically depict this original short run equilibrium (SRE), showing (a) P (price), (b) Q (market output), (c) q (representative firm's output), and (d) π (representative firm's profit).
You are the principal economist at a firm that produces some output y based on the following function: y = f(x1, x2) = x ³ x ² 1. Calculate the marginal product (MP) of both inputs at some arbitrary input bundle (x₁, x₂). Interpret the sign of both. 2. Using your answer in the previous part, calculate OMPT₂/0x₁. Interpret what this means. 3. Calculate the technical rate of substitution between ₁ and x2, i.e., MP/MP₂. 4. Does this production function exhibit increasing, decreasing, or constant returns to scale? Show. 1 5. Lay out a brief, realistic example of x₁, x2, y that fits the dynamics that you calculated.
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Suppose the representative firm of the economy has a production function of the form F(K, N) =AK0.5N 0.5 . The marginal product of labor is then given by MP N = 0.5AK0.5N −0.5 . The current capitalstock is K = 40. (a) Holding fixed capital at 40, draw a graph of output as a function of labor. What are some importantfeatures of this graph? (b) If A = 4 what is the Labor Demand Curve, ND(w), as a function of the real wage w? (c) Suppose labor is supplied inelastically with NS(w) = 10. What is the equilibrium wage w, employmentlevel N, and full employment output Y ? (d) Suppose that productivity unexpectedly increases to A = 6. What is the new equilibrium wage w,employment level N, and full employment output Y ?
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Instructions: Enter your answers as a whole number. b. Assume that MC is $13 in both markets and MC = ATC at all output levels. What price will the firm charge in each market? Group 1: units will be produced at a price of $ Group 2: units will be produced at a price of $ c. Based solely on these two prices, which market has the higher price elasticity of demand? The first market has the higher price elasticity of demand. The second market has the higher price elasticity of demand. d. What will be this monopolist's total economic profit? %24
Consider a product market with three consumers A, B and C with demand function PA = 6 – QA, PB = 6 – 2QB and PC = 12 – QC respectively, where P is the price in dollars and QA, QB and QC are the quantities demanded by Consumer A, B and C respectively. The marginal cost of the product is constant at $4. (i) If the product is public good, analyse the product and determine the optimal quantity of the product in the market.(ii) How will your answer be different if the product is a private good instead? (Hi there, may I requst for a detailed step by step explanation as i struggle with this topic. Thank you)
Suppose firms in this economy pay their workers efficiency wages. This practice will likely lead to a (faster, slower) adjustment of the economy to its long-run equilibrium because firms will be (less, more) likely to (reduce, raise) the wages of their employees.
We can get a sense of how model output responds to changes in inputs from sensitivity analyses. Some argue that we might draw very different conclusions when using different boundaries, especially when model output is a non-linear function of inputs. For example, we compute the net present value (NPV) of a business with a 10% discount rate. We can choose +/- 1% for our sensitivity analysis, or +/-5% for our analysis. For this reason, some argue that one can manipulate sensitivity analysis to support one’s prior. What do you think of this comment?
If Promus could make order amounts after realizing demand, what would the expected value of this information be? Use the simulation results to calculate the mean profit of this case to compare with the mean profit of the non-perfect information case. You will need to enter a formula for Sales.
Consider a market with the following supply and demand. (It may help to draw a graph for these questions.) P 5 6 7 8 9 10 11 12 13 14 QS 200 300 400 500 600 700 800 900 1000 1100 QD 800 750 700 650 600 550 500 450 400 350 If there is an external cost of $3, what is the efficient quantity? 500 (already answer) If there is an external benefit of $3, what is the efficient quantity? 700 (already answer) For the remaining questions assume that there is a $3 external COST. If the government wants to get the efficient quantity with a per/unit tax, how much should the tax be? 3 (already answer) Now imagine that they use tradable allowances. If they cap the quantity at 400 what would the value of these allowance be in the market? (Assume the…
1) Which of the following statements describes the force that drives the distribution of resources (goods and services, labor, and money) in a free-enterprise economy? A) Businesses are willing to supply more of a good or service at higher prices because the potential for profits is higher. B) Supply and demand curves intersect at the point where supply and demand are not equal. C) Changing the price of a product does not alter the supply curve. D) The price at which the number of products that businesses are willing to supply is inversely proportional to the amount of products that consumers are willing to buy at a specific point in time. E) Prices for goods and services vary according to the changes in supply and demand. 1)