Output determination under perfect competition .

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Answer 1

Question

Chapter 10, Problem 1DQ

To determine

Output determination under perfect competition.

Expert Solution & Answer

Explanation of Solution

A perfectly competitive firm can sell as much as it desires at the current market price. The profit maximizing output of a firm is fixed at the point where, MC = MR. The marginal revenue of a perfectly competitive firm is constant at each units of output while, the marginal costs increases as production increases. Therefore, the expansion of sale after when, the MC and MR (price) are equal would make loss.

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Please answer questions D-H, I have already answered A , B,C but it may help you to still solve them yourself. Thank you!

2. A firm’s production function is given by:Q = 10KLThe unit capital and labour costs are 2 and 1 pounds respectively. The firm is contracted to produce2000 units.(a) Write out the optimisation problem of the firm. (b) Express this problem using a Lagrangian function. (c) Find values of K and L which fulfil the contract with minimal cost to the firm. (d) Calculate the total cost to the firm.

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Answer 2

Question

Chapter 10, Problem 1DQ

To determine

Output determination under perfect competition.

Expert Solution & Answer

Explanation of Solution

A perfectly competitive firm can sell as much as it desires at the current market price. The profit maximizing output of a firm is fixed at the point where, MC = MR. The marginal revenue of a perfectly competitive firm is constant at each units of output while, the marginal costs increases as production increases. Therefore, the expansion of sale after when, the MC and MR (price) are equal would make loss.

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Answer 3

Question

Chapter 10, Problem 1DQ

To determine

Output determination under perfect competition.

Expert Solution & Answer

Explanation of Solution

A perfectly competitive firm can sell as much as it desires at the current market price. The profit maximizing output of a firm is fixed at the point where, MC = MR. The marginal revenue of a perfectly competitive firm is constant at each units of output while, the marginal costs increases as production increases. Therefore, the expansion of sale after when, the MC and MR (price) are equal would make loss.

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Answer 4

Question

Chapter 10, Problem 1DQ

To determine

Output determination under perfect competition.

Expert Solution & Answer

Explanation of Solution

A perfectly competitive firm can sell as much as it desires at the current market price. The profit maximizing output of a firm is fixed at the point where, MC = MR. The marginal revenue of a perfectly competitive firm is constant at each units of output while, the marginal costs increases as production increases. Therefore, the expansion of sale after when, the MC and MR (price) are equal would make loss.

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Answer 5

Chapter 10, Problem 1DQ

To determine

Output determination under perfect competition.

Expert Solution & Answer

Explanation of Solution

A perfectly competitive firm can sell as much as it desires at the current market price. The profit maximizing output of a firm is fixed at the point where, MC = MR. The marginal revenue of a perfectly competitive firm is constant at each units of output while, the marginal costs increases as production increases. Therefore, the expansion of sale after when, the MC and MR (price) are equal would make loss.

Answer 6

Chapter 10, Problem 1DQ

To determine

Output determination under perfect competition.

Expert Solution & Answer

Explanation of Solution

A perfectly competitive firm can sell as much as it desires at the current market price. The profit maximizing output of a firm is fixed at the point where, MC = MR. The marginal revenue of a perfectly competitive firm is constant at each units of output while, the marginal costs increases as production increases. Therefore, the expansion of sale after when, the MC and MR (price) are equal would make loss.

Answer 7

Chapter 10, Problem 1DQ

To determine

Output determination under perfect competition.

Answer 8

Expert Solution & Answer

Explanation of Solution

A perfectly competitive firm can sell as much as it desires at the current market price. The profit maximizing output of a firm is fixed at the point where, MC = MR. The marginal revenue of a perfectly competitive firm is constant at each units of output while, the marginal costs increases as production increases. Therefore, the expansion of sale after when, the MC and MR (price) are equal would make loss.