User Account

All Pages

Find market demand for good x

Assignment Help Business Economics
Reference no: EM132408669

This question will study the market for good x.

Suppose there is one consumer that is a price taker in all markets with the following preferences:

U(x, y) = 3x + y

This consumer has an income of I = 1000. There is one firm, which is a price-taker in the market for inputs and operates under perfect competition in the market for x. The firm follows the following production function, with inputs K and L, to produce good x:

f(K, L) = K 1/3L 1/3 Capital is fixed at K = 8. Wages and the rental rate for capital are w = 8/3 and r = 300, respectively. The price for good y is determined elsewhere at py = 300

(a) Find market demand for good x.

(b) Is f(K, L) increasing, decreasing or constant returns to scale?

(c) Find the short-run cost function for the firm producing good x.

(d) Find the short-run supply for x.

(e) What is the equilibrium market price and quantity for x.

(f) What is the equilibrium profit of the firm? Explain why the firm has incentives to keep operating.

Reference no: EM132408669

Questions Cloud

Sketching an as/ad model for case : Sketching an AS/AD model for each case, determine which of the following phenomena could be the cause. (There may be more than one.)
What is her cost of going to the atm : If Sally nominal interest rate is 5 percent and she has 15 percent probability of having cash lost and she spends 10 dollars each day and has the total cost
Opportunity costs and externalities : Explain why Sunk costs should not be included in a capital budgeting analysis, but opportunity costs and externalities (the effects on other areas of the firm),
Why is operating cash flows : Why is Operating Cash Flows, rather than accounting profits (Net Income), the better basis for emphasis on cash flows?
Find market demand for good x : This question will study the market for good x. Suppose there is one consumer that is a price taker in all markets with the following preferences:
Describe hypothesis testing for population proportions : Describe hypothesis testing for population proportions with regards to the p-value and What does the confidence interval tells us about a sample's mean
Absence of warranties or regulation in market : In the absence of warranties or regulation in this market, what would be the total profit for sellers from selling good used cars?
Adopting an open economy policy : Explain how the investment level is determined for a country after adopting an open economy policy
Increase in income on quantity and price : Using the model of supply and demand, find the effects of an increase in income on quantity and price.

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd