What are the implications of this for an industry

Assignment Help Econometrics

Reference no: EM131253631

1. Prove proposition 8.1.

2. (a) Prove that it is inconsistent with the theory of perfect competition that a firm in a long-run equilibrium would ever produce a (positive) quantity at which its long-run average costs are declining. What are the implications of this for an industry in which all firms have average costs that are perpertually declining?

(b) Prove that in any long-run equilibrium, firms produce at efficient scale or larger, and if a firm is making positive profits, it must be producing at larger than efficient scale. (You may assume that average and marginal cost curves are all continuous.)
Endless variations on the example given in section 8.2 and 8.3 can be played. Problem 3 is quite difficult; in it you consider the "equilibrium dynamics" in the second example from the text. In problem 4, you see what happens if there is limited entry into a competitive industry; in problem 5 we consider a case in which firms possess a number of different technologies; and in problem 6 you work through "equilibrium dynamics" when a factor price changes.

Reference no: EM131253631

Questions Cloud

Discuss the importance of each type of budget : Discuss the importance of each type of budget (master, sales, production, direct materials, manufacturing overhead, sales and administrative).

Possible combinations of capital and labor : a) Write a function which shows all possible combinations of capital and labor to produce 10 houses. b) What is the marginal product of labor? c) What is the marginal product of capital?

Describe features and characteristics of human resource mis : Have your team design a human resource MIS for a medium-sized retail store. Describe the features and characteristics of your human resource MIS.

Comparing the breakeven points in requirements : Sales mix, three products. The Janowski Company has three product lines of mugs—A, B, and C— with contribution margins of $5, $4, and $3, respectively. What is the company’s breakeven point in units, assuming that the given sales mix is maintained? C..

What are the implications of this for an industry : Prove that it is inconsistent with the theory of perfect competition that a firm in a long-run equilibrium would ever produce a (positive) quantity at which its long-run average costs are declining. What are the implications of this for an industr..

Growth of consumer information organizations : "The growth of consumer information organizations, legal requirements, and warranty requirements has caused significant increases in the cost of customer satisfaction. Thus it is no longer useful to talk about profit maximization as a company obje..

Which to conceal cash receipts from gross income : Discuss which penalties, if any, might be imposed on the tax adviser in each of the following independent circumstances. In this regard, assume that the tax adviser: Suggested to the client various means by which to acquire excludible income. Suggest..

Find an example of an external audit : Do research on the Web to find an example of an external audit that uncovered serious problems at an organization.

How company plans to accommodate for the decrease in sales : In 2012, Barney and Co. saw a decrease in sales of 20%. The company had also recently purchased equipment to increase productivity, but has incurred the additional expense of paying back the loan for equipment. The loan makes up for 5% of the company..

User Account

All Pages