Impacts upon the aggregate expenditure

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Reference no: EM136958

Q1. Numeral stores propose film developing as a examine to their customers. Suppose that each store offering this service has a cost function C(q) = 50 + 0.5q + 0.08q2 and a marginal cost MC = 0.5 + 0.16q. If the going rate for developing a roll of film is $8.50, is the industry in long-run equilibrium? Discover the price connected with long-run equilibrium?

Q2. Explain how each change mentioned in the article impacts upon the aggregate expenditure model and then explain how such changes result in a new equilibrium in that model. Your answer should encompass discussion of changes to the level of inventories.

Reference no: EM136958

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