Find the long run market price

Assignment Help Business Economics

Reference no: EM131377246

Suppose a ?rm’s produces computers and its associated costs are only function of the numbers of computers its produces. The cost function is given by C(y) = y3−8y2+32y

(a) Find the long run market price that prevails if this ?rm is operating in a perfectly competitive market.

(b) Derive the shut-down condition for the general case (see your notes), where pro?ts are given by π = py−C(y), and C(y) = Cv(y)+F. An answer with just maths is not enough, tell me the intuition behind the condition

Reference no: EM131377246

Questions Cloud

Preventing another recession or promoting strong recovery : Did the Federal Reserve's actions succeed in preventing another recession or promoting a strong recovery? Identify which credit facilities/programs were effective and which were not as effective.

The average rate of growth of per capita real GDP : Since the early 1990s, the average rate of growth of per capita real GDP in Mozambique has been 3 percent per year, If a typical resident of each of these nations begins this year with a per capita real GDP of $3,000 per year, about how many more dol..

Derive the monopoly price and quantity of dominant : Assume annual market demand for UVic coffee mugs is given by P=20-Q, where P is the price, and Q is the quantity of these fancy collector's items. Derive the monopoly price and quantity of Dominant both graphically and mathematically. In your graph s..

What is the resulting impact on the money supply : "An increase in money causes the interest rate to rise. But a rise in the interest rate causes people to demand less money. It follows that increases in money demand cancel themselves out, and the interest rate is not affected." Is this correct? Why ..

Find the long run market price : Suppose a ?rm’s produces computers and its associated costs are only function of the numbers of computers its produces. The cost function is given by C(y) = y3−8y2+32y. Find the long run market price that prevails if this ?rm is operating in a perfec..

What are optimal quantities and prices for the two markets : A firm is able to charge different prices in the Domestic and Foreign markets. The Domestic market demand curve is Qd = 24 - Pd , while the Foreign market demand curve is Qf = 18 - Pf. Suppose the firm has a cost curve for total output Q given by ?C(..

What is actuarially fair premium for each type of policy : Chimnesia has two equally sized groups of people: smokers and nonsmokers. Both types of people have utility U = √C where C is the amount of consumption that people have in any period. So long as they are healthy, individuals will consume their entire..

Economy is producing below the potential level of output : Suppose the economy is producing below the potential level of output. If the Fed decided to use open market operations (OMOs) to bring about production at the potential level of output, will they buy or sell government securities? Illustrate your ans..

Illustrate the impact on the money market : Suppose the Fed sought to neutralize the demand shock in #9. What tools could the Fed use? Explain and illustrate the impact on the money market, and the AD-AS diagram. Determine what happens to the interest rate, investment spending, autonomous cons..

User Account

All Pages