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Assuming that all of each firm's $16 fixed cost is sunk, what is a firm's short-run supply curve? What is the short-run market supply curve?
How many windows should Ron wash to maximize profit? Graph SMC, SAC, and the profit-maximizing quantity. On this graph, indicate the maximum daily profit.
What is the equation for the average variable cost (AVC)? What is the minimum level of average variable costs?
Draw the shop's total revenue and total cost curves, and graph the total profit function on the same diagram.
Suppose a competitive, profit-maximizing firm operates at a point. What does the short-run average cost curve imply about the firm's economic profits?
A firm in a competitive industry produces its output in two plants. What fraction of the firm's total supply will be produced at plant 2?
Determine the numerical value of the price elasticity of supply at that point when the supply curve is vertical at a positive quantity.
What is meant by the incidence of a tax? How is the incidence of an excise tax related to the elasticities of supply and demand in a market?
What is the size of the deadweight loss in a competitive market with no government intervention?
Assuming that all of the firm's fixed costs are sunk, what is the producer surplus of individual firm and what is the overall producer surplus for the market?
What is the producer surplus for this firm if the market price is $20? By how much does producer surplus change when the market price increases from $20 to $21?
Why does the derivation of the long-run market supply curve differ from the derivation of the short-run market supply curve?
Find the long-run equilibrium price and quantity in terms of a, b, and c. Can you determine the equilibrium number of firms? If so, what is it? If not, why not?
How much would an individual firm produce? How many active producers are in the propylene market in a long-run competitive equilibrium?
What is the long-run equilibrium price for cobalt? How much cobalt does each producer make at this equilibrium price?
From this information, what would you conclude about the price elasticity of supply in the U.S. rose market?
How would an increase in the price of labor shift the long-run average cost curve?
Explain why an increase in the price of an input typically causes an increase in the long-run total cost of producing any particular level of output.
Write down the production function corresponding to this process (i.e., express B as a function of C and D).
The rental price of a unit of capital is 2 when the wage rate is 1. Is the firm minimizing its total long-run cost of producing the 32 units of output?
How much money is the firm sacrificing by not having the ability to choose its level of capital optimally?
Write down a production function of a firm that produces bicycles out of frames and wheels. No assembly is required by firm, so labor is not an input in case.
Find the optimal input combinations for each set of prices and use these to calculate the firm's price elasticity of demand for labor over this range of prices.
Suppose a production function is given by Q = 10K +2L. The factor price of labor is 1. Draw demand curve for capital when firm is required to produce Q = 80.
Sketch graph of the demand curve for labor when the firm wants to produce 10 units of output and the price of capital services is $1 per unit (Q = 10 and r = 1)