Suppose the price of bagels in Allentown is currently S0.90 per bagel. There are 10 low-cost bakeries and 10 high-cost bakeries that can produce bagels, each of which has the supply function o-con 200P - 105 ahhcot = 200P - 205 (These individual supply functions apply in the short run and the long run) low-cost bakery: high-cost bakery: a. Which bakeries wil be active when the price is $0.90? Only low-cost bak eries will be active b. If the price rises to $1.40. what will be the market supply in the short run? What will be the market supply in the long run?

Suppose the price of bagels in Allentown is currently S0.90 per bagel. There are 10 low-cost bakeries and 10 high-cost bakeries that can produce bagels, each of which has the supply function o-con 200P - 105 ahhcot = 200P - 205 (These individual supply functions apply in the short run and the long run) low-cost bakery: high-cost bakery: a. Which bakeries wil be active when the price is $0.90? Only low-cost bak eries will be active b. If the price rises to $1.40. what will be the market supply in the short run? What will be the market supply in the long run?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Does a compentve firms price equal its marginal cost in a short run, on the long run or both? Explain, Does a competitive firms price equal the minimum of its average total cost in the short run, in the long run, or both ? Explain
The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a purely competitive firm that produces novelty ear buds. Assume the market for novelty ear buds is a competitive market and that the price of ear buds is $6.00 per pair. Buddies Production Costs Quantity MC ATC of Ear Buds ($) ($) 20 1.00 25 2.00 1.20 30 2.46 1.41 35 3.51 1.71 40 4.11 2.01 45 5.43 2.39 50 5.99 2.75 55 8.47 3.27 Instructions: In part a, enter your answer as the closest given whole number. In parts b-d, round your answers to two decimal places. a. If Buddies wants to maximize profits, how many pairs of ear buds should it produce each week? pairs b. At the profit-maximizing quantity, what is the total cost of producing ear buds? 2$ c. If the market price for ear buds is $6 per pair, and Buddies produces the profit-maximizing quantity of ear buds, what will Buddies profit or loss be per week? 2$
Mm
4. For production functions i) q = K0.25L0.25, ii) q = K0.5L0.5, iii) q = KL a) Assume w= $20 and v = $20, what are the long-run MC and AC equations? b) Tum the MC functions into firmlong-run supply equations. c) Graph the MC and AC functions. Assume that the price of output is $20, explain how the q = = q(p = $20) might or might not be a profit-maximizing outcome and whether the SOC's will be satisfied.
Under average-cost pricing, the government will raise the price of output whenever a firm's costs increase, and lower the price whenever a firm's costs decrease. Over time, under the average-cost pricing policy, what will the local internet service provider most likely do? Work to decrease its costs O Allow its costs to increase
Am. 106.
am. 116.
Use the following graph: The graph below pertains to the supply of paper to colleges and universities. price quantity Refer to the graph above. All else equal, an increase in the price of pulp input used in the paper production process would cause a move from: Oy to x O SA to SB Ox to y O SB to SA
Farmer Lee grows strawberries. The average total cost and marginal cost of growing strawberries in the long run for an individual farmer are illustrated in the graph to the right. Suppose the market price is $7.05 per box. If so, then farmers will strawberries until the market price is $ number rounded to two decimal places.) per box. (Enter a numeric the market for a real enter exit Price and cost (dollars per box) 10- 9- 8- 5- 3- 2- 1. 0 MC ATC 10 20 30 40 50 60 70 80 90 100 Quantity of strawberries (boxes per week) o
Profit is the incentive that drives our market economy. Firms make production, pricing, andhiring decisions based on their quest for profit. But what happens when a firm discoversthat it can make dramatically higher profits by stopping production altogether? In December2000, due to wild swings in the market for electricity, Kaiser Aluminium faced just such adecision.Kaiser Aluminium had contracted with Bonneville power for all of its electricity needs andfound itself in the unique position of being an electricity consumer and, potentially, anelectricity reseller. By December 2000, Kaiser faced a difficult decision of continuing itscurrent aluminium production and profit levels, or closing the plant to dramatically increaseits profit by simply reselling its electricity.When making production decisions, firms must consider both their costs and revenues. Oneimportant concern for many firms is utility costs. In 1996, Kaiser Aluminium Corporation inSpokane, Washington, entered into a…
Assume that restaurants in aiports rent the space that they occupy and that the restaurant industry is competitive. Keeping in mind the concept of economic rent, we know that food prices will be higher at the airport restaurants than at other locations because: O airport restaurants generate larger economic profits than other restaurants at different locations. O the number of potential customers is greater at the airport locations. O the rent paid by the restaurant is higher than the rent paid at other locations. O demand for food at airports is less elastic than at other locations.
Copy of The following graph displays four supply curves (HH, II, JJ, KK) that intersect at point A. PRICE (Dollars per unit) 400 360 320 280 240 200 160 120 80 40 0 H 0 40 80 A SE H + 120 160 200 240 280 320 360 400 QUANTITY (Units) Using the graph, choose the statements that are true: Between points A and C, curve KK is inelastic. Between points A and B, curve II is perfectly inelastic. Curve KK is more elastic between points A and C than curve JJ is between points A and D. Between points A and E, curve HH is perfectly inelastic.