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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)
Draw a graph of the demand curve for labor when the firm wants to produce 10 units of output (Q = 10).
Explain why the short-run marginal cost curve must intersect the average variable cost curve at the minimum point of the average variable cost curve.
What shape would the short-run marginal cost curve be? What shape would the short-run average cost curve be?
What is the difference between economies of scope and scale? Is it possible for a two product firm to enjoy economies of scope but not economies of scale?
Derive the equations for the long-run total cost curve and the long-run average cost curve.
Derive the expression for the corresponding long-run average cost curve and then sketch it. At what quantity is minimum efficient scale?
Over what range of output does the production function exhibit economies of scale, and over what range does it exhibit diseconomies of scale?
How do the graphs of the long-run and short-run total cost curves change when w = 1 and r = 2?