Suppose there are 1,000 identical firms producing diamonds and the total cost curve for each firm...
Suppose there are 1,000 identical firms producing diamonds and the total cost curve for each firm is given by: C = q^2 + wq where q is the firm’s output level and w is the wage rate of diamond cutters.
(a) Calculate the firm’s profit function, π(w, p).
(b) If w = 10, what will be the firm’s short-run supply curve and the industry’s supply curve?
(c) How many diamonds will be produced at a price of $20 each? How many more diamonds would be produced at $21?
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Suppose there are 1,000 identical firms producing diamonds and
the total cost curve for each firm...
Exercise 1. Short-Run Industry Supply Curve In a perfectly competitive market there are n firms with...
Exercise 1. Short-Run Industry Supply Curve In a perfectly competitive market there are n firms with identical technology: yi=Li½Ki½. Each firm’s cost function is Ci=wLi+rKi where w=r=1. a) In the short run all firms have a fixed level of Ki=100, so that yi=10Li½ and Ci=Li+100. What is the cost function Ci(yi)? What is the short-run average cost function ACi(yi)? b) What is each firm’s marginal cost function MCi(yi)? What is each firm’s short-run supply function si(p)? Find the inverse of...
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Consider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC)
7. Short-run supply and long-run equilibrium Consider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. The following diagram shows the market demand for copper. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (Hint:...
Consider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on
7. Short-run supply and long-run equilibrium Consider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph.The following diagram shows the market demand for copper.Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (Hint:...
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Suppose there is a perfectly competitive industry where all the firms are identical with identical cost...
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Consider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the Industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on
6. Short-run supply and long-run equilibrium Consider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the Industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. The following diagram shows the market demand for copper. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (Hint:...
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Suppose all firms in the market are identical. Each firm has a long run total cost curve LTC = 40Q – Q2 + 0.01Q3. The market demand curve is Q = 20,000 – 100P. Find the long run equilibrium quantity per firm, price, and number of firms in the market.
6. Short-run supply and long-run equilibrium Consider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the Industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. The following diagram shows the market demand for copper. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (Hint:...
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