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Qd=1200-2P and Qs-3p what is the equilibrium price and quantitu
1. A marketing research conducted by firm company result shows the firms production function and its demand as the following equation. And the demand function is given by 100. Using the given information answer the following question.
a. If you are this firms manager how are you suggest your firms owner to add the input x in order to be at maximum average production? Support your suggestion with evidence from the production function given.
b. If the firms owner decide to add the 10th x what is your advice to this owner as an economist? Support your answer with graph
c. If the firms market is perfectly competitive, how many outputs must be produced to be at maximum profit? At maximum point how many input(x) is required? Hint assumes the above equation as total cost of production.
d. Identify and show the production stage of the given production function. After identifying each stage recommend the owner as an advisor of this company at each final points of the stage.
Given the two factor product in Q= 150L^0.5 K^ 0.5, wage rate of labour = 50 and rental cost of capital = 40. Determine the amount of labour and capital that will minimize the cost of producing 1118 units of output?
How does a competitive firm determine its profit-maximizing level of output? Explain
Q.2 Suppose you take a job that pays $30,000 and set some of this income aside in a savings account
that pays an annual interest rate of 5 percent. Use a diagram with a budget constraint and
indifference curves to show how your consumption changes in each of the following situations. To
keep things simple, assume that you pay no taxes on your income.
a. Your salary increases to $40,000.
b. The interest rate on your bank account rises to 8 percent.
Q 1 a) The Output and the total cost data for a firm are given below. Work out the following costs.
Total Fixed cost, Total Variable cost, Average Fixed cost, Average Variable cost, Average Total cost and
Marginal cost at various levels output.
Units of output 0 1 2 3 4 5 6
Total cost (Rs.) 60 90 100 105 115 135 180
b) If the total cost is positive at zero level of output, what does it signify?
Amanda can build 10 tables in an hour. She can also build 25 chairs in an hour. She spends 8 hours a day working (building tables/chairs).
- Draw and label Amanda’s production possibility frontier for building tables and chairs.
- What is Amanda’s opportunity cost of building 75 chairs?
Consider the following events: Scientists reveal that
eating oranges decreases the risk of diabetes, and at
the same time, farmers use a new fertilizer that makes
orange trees produce more oranges. Illustrate and
explain what effect these changes have on the
equilibrium price and quantity of oranges.
The market for pizza has the following demand and
supply schedules:
Price Quantity Demanded Quantity Supplied
$4 135 pizzas 26 pizzas
5 104 53
6 81 81
7 68 98
8 53 110
9 39 121
a. Graph the demand and supply curves. What are
the equilibrium price and quantity in this market?
b. If the actual price in this market were above the
equilibrium price, what would drive the market
toward the equilibrium?
c. If the actual price in this market were below the
equilibrium price, what would drive the market
toward the equilibrium?
playing rock ‘n’ roll music at high volume. Placido loves opera and hates rock ‘n’ roll. Unfortunately, they are next-door neighbors in an apartment building with paper-thin walls. a. What is the externality here? b. What command-and-control policy might the landlord impose? Could such a policy lead to an inefficient outcome? c. Suppose the landlord lets the tenants do whatever they want. According to the Coase theorem, How might Bruno and Placido reach an efficient outcome on their own? What might prevent them from reaching an efficient outcome?
