What kind of technology does the firm have in terms of returns to scale? Why? Suppose that the capital input is fixed at K = 16. Derive the conditional factor demand for labor and the cost function. Does the firm have the economies of scale? Why or why not? Suppose that both inputs are variable. Derive the conditional factor demands for labor and capital, and the cost function. Does the firm have the economies of scale? Why or why not? B. Suppose that the capital input is fixed at K = 16. Derive the supply curve (inverse supply function) and explain why it has such a shape. Suppose that there are 100 firms (who have the same technology of y = LEK) in the market. What are the (short-run) equilibrium price and output each firm sells? How much profit (or loss) does each firm have? Explain your answers (about the short-run equilibrium) using graphs. What will happen in the market price

What kind of technology does the firm have in terms of returns to scale? Why? Suppose that the capital input is fixed at K = 16. Derive the conditional factor demand for labor and the cost function. Does the firm have the economies of scale? Why or why not? Suppose that both inputs are variable. Derive the conditional factor demands for labor and capital, and the cost function. Does the firm have the economies of scale? Why or why not? B. Suppose that the capital input is fixed at K = 16. Derive the supply curve (inverse supply function) and explain why it has such a shape. Suppose that there are 100 firms (who have the same technology of y = LEK) in the market. What are the (short-run) equilibrium price and output each firm sells? How much profit (or loss) does each firm have? Explain your answers (about the short-run equilibrium) using graphs. What will happen in the market price

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.9P

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Dr. D. is a critic of standard microeconomic analysis.In one of his frequent tirades, he was heard tosay, ‘‘Take the argument for upward-sloping,long-run supply curves. This is a circular argumentif I ever heard one. Long-run supply curves aresaid to be upward sloping because input pricesrise when firms hire more of them. And that occursbecause the long-run supply curves for theseinputs are upward sloping. Hence, the argumentboils down to ‘long-run supply curves are upwardsloping because other supply curves are upwardsloping.’ What nonsense!’’ Does Dr. D. have apoint? Explain clearly.
Please answer E&F
Suppose the production function for high quality brandy is given by : Q = √KL Where q is the output of brandy per week and L is labor hours per week ., in the short run K is fixed at 100, so the short run production function is Q = 10√L a. Ifthecapitalrentsfor10$andthewageare5$perhour.,writetheshortruntotalcost function. b. How much will the firm produce at a price of 20$ per bottles of brandy ? c. Howmanylaborhourswillbehiredperweek?
2. The Acme Anvil Company's output is given by the Cobb-Douglas Production function P = 60L2/3K1/3, where P is the number of anvils produced when L is the amount spent on labor and K is the amount spent on capital. a. What is the production if L = 150 and K = 150? b. Find the marginal productivities. c. Evaluate the marginal productivities with L = 150 and K = 150. d. Interpret the meanings of the marginal productivities found in part c. e. If their budget is $300 then there is a constraint L+ K = 300. Use Lagrange multipliers (2) to find the values of L and K that will maximize production and find the maximum production f. Find 2. 12| is called the marginal productivity of money and will give the number additional units produced for each dollar increase in the budget. Interpret 2 for this problem. Only need paVAS e and fl
can someone pls explain if marginal product function (i.) and (ii) are either convex or concave? what is their economic implication?
answer pls help me
When both factor and non-factor input change, the period of production is_ O a. Mid-run O b. Long run O. None of these O d. Short run When the quantity demanded for a commodity is 400 units but the quantity supplied is 150 units it is called. O a. Shortage of supply O b. Equilibrium of demand Oc. Equilibrium of supply O d. Surplus of supply
The Acme Anvil Company's output is given by the Cobb-Douglas Production function P = 60L2/3 K1/3, where P is the number of anvils produced when Lis the amount spent on labor and K is the amount spent on capital. a. What is the production if L = 150 and K = 150? b. Find the marginal productivities. C. Evaluate the marginal productivities with L = 150 and K = 150. d. Interpret the meanings of the marginal productivities found in part c. e. If their budget is $300 then there is a constraint L+ K = 300. Use Lagrange multipliers (2) to find the values of L and K that will maximize production and find the maximum production f. Find 2. 12| is called the marginal productivity of money and will give the number additional units produced for each dollar increase in the budget. Interpret 2 for this problem. MacBook Pro urses/34419/files/5014304?wrap=1
8. A firm's total cost function is given by TC = 3Q; +2Q,Q, + 7Q: Where Q, and Q. denotethe number of it ems of goods 1 and 2, respect ively that are produced. Using the substitution met hod, find the values of Q, and Q. which minimize costs if the firm is committed to producing 40 goods of eit her type in total.
1. A firm’s production function is , where Ldenotes the size of the workforce. Find the value of MPLin the case when: (a) L=1, (b) L=10, (c) L=100, (d) L=1000 Does the law of diminishing marginal productivity apply to this particular function? 2. Show that the price elasticity of demand is constant for demand functions of the form where A and n are positive constants. 3. The demand and total cost functions of a good arerespectively and a) Find expressions for TR, (profit) , MR, and MC in terms of Q. b) Solve the equation and hence determine the value of Q which maximizes profit. c) Verify that, at the point of maximum profit, MR=MC. 4. The cost of building an office complex, x floors high, in a prime location in Accra is made up of three components: (a) GH¢10 million for the land (b) GH¢1/4 million per floor (c) Specialized costs of GH¢10000x per floor. How many floors should the office complex contain if the average cost per floor is to be minimized? 5. The supply…
In the short run, given a market price equal to $50 per pressure cooker, the firm should produce a daily quantity of On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $50 and the quantity of production from your s answer. pressure cookers. profit Note: In the following question, enter a posit loss ber regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run thousand per day for the firm.
New taskFor a producer under complete competition, the following production function applies. Q = F (K, L) = KL where Q is the size of production, K is the size of the capital investment and L is the amount of labor. Assume that the price of capital, r, is 5 and that the salary, w, is 10. a) Assume initially that the capital is locked at 4 units. How much labor will the producer use to produce 50 units of the final product? What will be the total cost of producing these 50 units? b) For the production function above applies The marginal product for work MPL = K The marginal product for capital MPK = L Enter the cost-minimizing combination of capital and labor in the production of 50 units. Also enter the size of the costs. c) Write down the equation for the isocost line for the manufacturer