Suppose that there are two types of manager in a perfectly competitive industry—good and bad. A...
Suppose that there are two types of manager in a perfectly
competitive industry—good and bad. A good manager increases the
profit of a firm by €10,000.
a. If bad managers are paid €50,000 how much are good managers paid?
b. Why may it be an advantage to have a good manager?
Homework Answers
a. Good managers will be paid same as bad managers i.e euro 50,000 because the industry is perfectly competitive and in perfectly competitive market salaries would be same for all the employees.
b. Yes it be an advantage to have a good manager because the firm profit will increase more by euro 10,000 than that the firm will have with a bad manager.
Add Answer to:
Suppose that there are two types of manager in a perfectly
competitive industry—good and bad. A...
Suppose gizmos are produced in a perfectly competitive industry where two types of managers oversee the...
Suppose gizmos are produced in a perfectly competitive industry where two types of managers oversee the production. One type of the managers are called as alpha-type and the other as omega- type. There are only 100 alpha managers, whereas there is unlimited supply of omega managers Both types of managers are willing to work for a salary of $144,000 per year. The long-run total cost of a firm with an alpha manager at this salary is: TCAlpha (9)=144+q2 if q=0...
Assume that an industry is perfectly competitive. Each firm must hire a manager, and there exists...
Assume that an industry is perfectly competitive. Each firm must hire a manager, and there exists only 50 managers that display extraordinary talent. There is an unlimited supply of managers with average talent. The long run total cost function of the firms run by exceptional managers is LTCE=200+Q2. The long run total cost function of the firms managed by average managers is LTCA=200+2Q2. If market demand for this good is described by Qd=8000-100p, how much economic rent will each extraordinarily...
Suppose that a perfectly competitive industry is in long-run equilibrium. The price of a complement good...
Suppose that a perfectly competitive industry is in long-run equilibrium. The price of a complement good decreases. What will happen? A. Next period a typical firm will increase output. B. Next period a typical firm will earn positive economic profit. C Eventually firms will exit the industry. D. both a and b E. all of the above will happen
Suppose the bobby pin industry is perfectly competitive. The price of a packet of bobby pins...
Suppose the bobby pin industry is perfectly competitive. The price of a packet of bobby pins is $2.00. Pins and Needles, Inc. is a firm in this industry and is producing 1,000 packets of bobby pins per day at the point where the MC = MR. The average cost of production at this output level is $1.50 per packet. a. What is the marginal cost of the 1,000th packet? b. Is this firm making an economic profit, zero economic profit,...
Long Run Equilibrium 4. Suppose each firm in a perfectly competitive industry has the same long...
Long Run Equilibrium 4. Suppose each firm in a perfectly competitive industry has the same long run total cost function T C(q) = 16+q^2 . The market demand curve is QD = 100−P. (a) What 3 equations define a Long Run Perfectly Competitive Equilibrium? (b) How much quantity q ∗ does each firm produce in Long Run Perfectly Competitive Equilibrium? (c) What is the market price P ∗ in this equilibrium? (d) Find the market quantity Q∗ . ( e)...
A firm operates in a perfectly competitive industry. Suppose it has a total cost function of...
A firm operates in a perfectly competitive industry. Suppose it has a total cost function of C = 25 + 0.25Q2. a) If the market price is $15, what is the firm’s profit-maximizing level of output? b) If the fixed costs increase from $25 to $75, what is the firm’s profit maximizing level of output? c) If the market price increases to $22, what is the firm’s profit maximizing level of output (with fixed costs at $75)?
1. (20p) Suppose that, in a perfectly competitive industry, the technology for making the product (by...
1. (20p) Suppose that, in a perfectly competitive industry, the technology for making the product (by any single firm) has the total cost function c(q) = 200 + 4q+ Barriers to entry and exit the market are low and an unlimited number of firms could enter this industry, all with the same total cost function. (a) Compute the long-run equilibrium price in this industry, as well as the amount of output each firm would produce at this price. Explain the...
¬8) Assume a perfectly competitive industry. In the short run suppose that the market price for the good is $10. You als...
¬8) Assume a perfectly competitive industry. In the short run suppose that the market price for the good is $10. You also know that the minimum point on the average variable cost curve occurs at $6 per unit while the minimum point on the average total cost curve occurs at $11 per unit. From this information you know that in the short run, firms in this industry ____ and in the long run, holding everything else constant, there will be...
1. 10 pts. A farming firm sells wheat in a perfectly competitive market. The firm's total...
1. 10 pts. A farming firm sells wheat in a perfectly competitive market. The firm's total costs are C(Q)=10Q-692 +Q3. The wheat industry is currently at its long-run equilibrium. a. How much wheat is this firm producing (what is Q*)? b. What is the market price? c. How much profit is this firm earning? d. Suppose the demand for wheat increases, which increases the market price to $10. How should this firm adapt to this price change? e. What profit...
2. A firm operates in a perfectly competitive industry. Suppose it has a short run total...
2. A firm operates in a perfectly competitive industry. Suppose it has a short run total cost function given by TC= 10000 +0.04q?. If the market price is 56, the firm's profit-maximizing quantity is?
Suppose gizmos are produced in a perfectly competitive industry where two types of managers oversee the production. One type of the managers are called as alpha-type and the other as omega- type. There are only 100 alpha managers, whereas there is unlimited supply of omega managers Both types of managers are willing to work for a salary of $144,000 per year. The long-run total cost of a firm with an alpha manager at this salary is: TCAlpha (9)=144+q2 if q=0...
1. (20p) Suppose that, in a perfectly competitive industry, the technology for making the product (by any single firm) has the total cost function c(q) = 200 + 4q+ Barriers to entry and exit the market are low and an unlimited number of firms could enter this industry, all with the same total cost function. (a) Compute the long-run equilibrium price in this industry, as well as the amount of output each firm would produce at this price. Explain the...
1. 10 pts. A farming firm sells wheat in a perfectly competitive market. The firm's total costs are C(Q)=10Q-692 +Q3. The wheat industry is currently at its long-run equilibrium. a. How much wheat is this firm producing (what is Q*)? b. What is the market price? c. How much profit is this firm earning? d. Suppose the demand for wheat increases, which increases the market price to $10. How should this firm adapt to this price change? e. What profit...
2. A firm operates in a perfectly competitive industry. Suppose it has a short run total cost function given by TC= 10000 +0.04q?. If the market price is 56, the firm's profit-maximizing quantity is?
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 11 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 11 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 11 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 11 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 11 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 11 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 11 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 11 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 11 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 11 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 11 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 11 months ago