Please explain the following:
The supply curve of the firm is MARGINAL COST in THE RATIONAL RANGE OF PRODUCTION.
&
A profit maximizing/loss minimizing perfectly competitive firm WILL PRODUCE SO LONG AS ALL VARIABLE COSTS ARE COVERED.
In: Economics
a piece of construction equipment will cost $71,000 new and will have an expected life of 6 years, with no remaining value at the end of its life. what is the equivalent uniform annual cost of this piece of equipment if the interest rate is 10%?
In: Economics
For a perfectly competitive firm, the
a.demand curve is the same as the marginal cost curve.
b.demand curve is the same as the marginal revenue curve.
c.demand curve lies above the marginal revenue curve.
d.demand curve is downward-sloping.
e.none of the above
In: Economics
The heat loss through the windows of a home is estimated to cost the homeowner $412 per year in wasted energy. Thermal windows will reduce heat loss by 93% and can be installed for $1,232. The windows will have no salvage value at the end of their estimated life of 8 years. Determine the net present equivalent value of the windows if the interest rate is 12%?
In: Economics
Explain short-run cost behavior. AVC, AFC, ATC, MC.
In: Economics
Consider firm organization:
Identify the three sources of cost that vertical integration is intended to mitigate or eliminate. However, no firm is completely vertically integrated, implying there is a cost to vertical integration. Identify this cost and very briefly relate it to firm size and scope.
In: Economics
Demand in a market is given by QD = 500 - 10P. The marginal cost of production is constant and MC = 10. In a competitive industry, that implies that marginal cost is perfectly elastic at a price of P = 10.
1.) What quantity is demanded at a price of P = 10?
2.) What is the marginal private benefit of consumption (measured in dollars per unit of consumption)?
3.) The marginal external benefit (MEB) of consumption, measured in dollars per unit of Q, is given by MEB = 12.5 - 0.025Q. What is the marginal social benefit of consumption, expressed as a function of Q?
4.) What is the efficient quantity of consumption/production in this market?
5.) What is the deadweight loss (measured in dollars) associated with the competitive market equilibrium that you calculated in question 1?
6.) What Pigouvian subsidy (measured in dollars per unit of consumption) would induce the economically efficient outcome?
In: Economics
Is the CPI a good way to measure the cost of living? What are the limitations and why are these important to economics?
In: Economics
Suppose the demand and marginal cost equations for a monopolist are as follows: Q = 6600 – 2P MC = 2Q.
a. Find the inverse demand equation and the marginal revenue equation.
b. Find the profit maximizing quantity and price for this monopolist (remember to set MR = MC and solve for Q).
In: Economics
Assignment: Draw a graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm). (Photos of your work are not accepted) Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. What happens to the firm’s profits? Does price discrimination lead to a more efficient or less efficient outcome? Why or why not?
In: Economics