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A number of stores offer film developing as a service to their costumers. Suppose that each store that offers this service has a cost function C(q)=50+0.5q+0.08q2 .(a) If the current rate for developing a roll of film is $8.5, is the industry in long run equilibrium? Explain.(b) If the firm is not in a long run equilibrium, find the price associated with long run equilibrium.(c) Suppose now that a new technology is developed which will reduce the cost of film developing (total cost) by%25. Assuming that the industry is in long run equilibrium, how much would any one store be willing to pay to purchase this new technology?Problem 3You are given the following information about a particular industry:
Qd=6500-100PQs=1200Pc(q)=722+q^2/200
Where QD is the market demand, QS is the market supply and MC(q) is the firm total cost function.Assuming that all firms are identical, and that the market is characterized by pure competition,(a) Find the equilibrium price, the equilibrium quantity, the output supplied by each firm and the profit of the firm in the short run.(b) Would you expect to see entry into or exit from the industry in the long-run? Explain. What effect will entry or exit have on market equilibrium?(c) What is the lowest price at which each firm would sell its output in the long run? Is profit positive, negative or zero at this price? Explain.
Define the factor that estimate the slope of the LM curve and whether an increase in theses factor will make the curve flatter or steeper.
The price of Labor (L) is $50 for each unit and the price of capital (C) is $20 per unit. How much labor and capital should Joy employ to produce 100,000 units? Find out the total cost of production?
Consider the following demand schedule. Does it apply to the perfectly competitive firm? Calculate marginal and average revenue.
You're advising a friend who has a decision to make regarding Social Security. He is about turn 62 years old, and is eligible for early Social Security benefits. His early benefits would amount to $677 each month.
A new competitor enters the industry and competes with a second firm, which had been a monopolist. The second firm finds that although demand is not perfectly elastic, it is now relatively more elastic.
Think a small open economy with a fixed exchange rate system. Assume there is a general expectation that central bank will revalue the domestic currency in the future
Firm Z, operating in a perfectly competitive market, can sell as much or as little as it wants of a good at a price of $16 per unit. Its cost function is C=50+4Q+2Q^2. The associated marginal cost is MC=4+4Q, and the point of minimum average cost ..
What are three main factors of production? Who are the main economic decision makers in a Markey system? Can firms and households resolve problems by cooperating with each other?
Construct a table showing the marginal cost of production. What is the minimum price necessary for the company to supply ten thousand copies? How many copies would the company supply at industry prices of $5,500 and $7,000 per ten thousand?
Suppose that MN Company is currently selling 300 units of Product SD per month. Management wants to increase sales and feels this can be done by cutting the selling price by $22 per unit and increasing the advertising budget by $20,000 per month. ..
Economists make decisions by thinking in terms of alternatives. Why do economists thinks there is no such thing as a free lunch?
Name three goods or services with highly elastic price elasticity of supply. Name three goods or services with highly inelastic price elasticity of supply.
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