Homework Help is Here – Start Your Trial Now!
Business
Economics
Suppose that wood industry is a perfectly competitive industry that involves 160 identical firms. The production function of each of these identical firms is as follows: 1 1 q = KZLZ where K denotes capital and L denotes labor with the corresponding prices: PK = 10 and P, 12. Suppose that capital is fixed K=12 and market %3D %3D demand function is given as follows: QD = 1,600 - 20P %3D What is the economic profit at the equilibrium, respectively?

Suppose that wood industry is a perfectly competitive industry that involves 160 identical firms. The production function of each of these identical firms is as follows: 1 1 q = KZLZ where K denotes capital and L denotes labor with the corresponding prices: PK = 10 and P, 12. Suppose that capital is fixed K=12 and market %3D %3D demand function is given as follows: QD = 1,600 - 20P %3D What is the economic profit at the equilibrium, respectively?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
See similar textbooks
icon
Related questions
Question
choose the right answer: Suppose that wood industry is a perfectly competitive industry that involves 160 identical firms. The production function of each of these identical firms is as follows: 1 1 q = KZLZ where K denotes capital and L denotes labor with the corresponding prices: PK = 10 and P 12. Suppose that capital is fixed K=12 and market %3D demand function is given as follows: QD = 1,600 – 20P %3D What is the economic profit at the equilibrium, respectively? a) economic profit of $64 b) zero economic profit c) exconomic loss $42 economic loss of $56
Transcribed Image Text:choose the right answer: Suppose that wood industry is a perfectly competitive industry that involves 160 identical firms. The production function of each of these identical firms is as follows: 1 1 q = KZLZ where K denotes capital and L denotes labor with the corresponding prices: PK = 10 and P 12. Suppose that capital is fixed K=12 and market %3D demand function is given as follows: QD = 1,600 – 20P %3D What is the economic profit at the equilibrium, respectively? a) economic profit of $64 b) zero economic profit c) exconomic loss $42 economic loss of $56
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS