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Suppose a monopolistic competitor and long-run equilibrium has a constant marginal cost of six dollars and faces the demand curve given in the following table:
Price Quantity
14 2
12 4
10 6
8 8
6 10
4 12
2 14
0 16
A. What output will the firm choose?
B. What will the monopolistic competitor's average fixed cost at the output it chooses?
Suppose individuals require a certain level of food (x) to remain alive. Let this amount be given by X0. Once X0 is purchased, individuals obtain utility from food and other goods (y) of the form.
Under what conditions are cournot and bertrand equilibria the same? You may assume the market demand is p = a ? bQ. Consider when firms are identical and different. If not, please explain why.
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As the manager of smith construction you need to decide on the number of homes to build in a new residential area where you are the only builder. How many homes should you build and what profits can you expect.
can increase the natural rate of unemployment. Is this something that policymakers should be concerned with? Explain.
The Federal Reserve Board is considerining changing its target inflation rate. However, they are concerned about the immediate effect on inflation. Find the sensitivity of equilibrium inflation to a change in the Fed's target inflation rate in the..
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Why might we imagine that this factor will continue to achieve the same effect in the future? iii. Indicate what factors might push in the opposite direction.
Describe the demand and marginal revenue curves faced by a firm in a purely competitive market. Are they different from those faced by a firm in oligopolistic competition? If so Why?
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