What implications do they have on the type of companies

Assignment Help Microeconomics

Reference no: EM133422820

Questions: Now suppose that firms are heterogeneous in terms of marginal costs. As in the previous exercise, firms face a fixed cost of production F. Consider two firms whose marginal costs are c1 < c2

1. Assume the economy is closed. Show on a graph that the most productive companies are larger, charge lower prices, have higher markups and higher operating profits. Draw on another graph the relationship between operating profit and marginal cost.

2. Why can we say that in this model, trade generates winners and losers? Show it on a graph.

3. If trade costs are added to the model, what implications do they have on the type of companies that become exporters?

Reference no: EM133422820

Questions Cloud

Compare vitro and in vivo models of secondary haemostasis. : Describe the routine tests for the assessment of secondary haemostasis and include the possible sources of error. Comment on the patient's laboratory results.

Present a strong enough case as to why you selected : Present a strong enough case as to why you selected those two particular browsers.

Benefits of moving to a public cloud infrastructure : Performing a SWOT (strengths, weaknesses, opportunities, and threats) analysis can provide insight when planning for incident response

What are labor unions economic advantages and disadvantages : What are labor unions' economic advantages and disadvantages to organizations and employees? Introduction to issue and title page, recommendations on how to add

What implications do they have on the type of companies : Show on a graph that the most productive companies are larger, charge lower prices, have higher markups and higher operating profits. Draw on another graph

How many pages would be returned if we search : How many pages would be returned if we search _digital OR literacy - search engine using the "Boolean conjunction" model

How does the change in the pay plan affect her total : If Sabrina continues to work 40 hours per week, how does the change in the pay plan affect her total income?

Pros and cons of open source software : What is the difference between symmetric and asymmetric encryption? What is the purpose of a public key in asymmetric encryption

Explain the shape of a firm''s long-run atc curve : explain the shape of a firm's long-run ATC curve. What is the concept of minimum efficient scale? What bearing can the shape of the long-run ATC curve have on

User Account

All Pages