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With the aid of a diagram explain on oligopolistic kinked demand curve. (10 Marks)
A cob Douglas production function for a firm is given as Q=4L ½K½. The firm has also established that wage rate and interest paid on capital are $3 and $5 respectively for a production period. The firm intents to spend $200 million for the period on production cost. Compute the levels of capital and labor that will maximize output. What is the maximum output? (10 Marks)
Suppose the market demand curve for a good is Qd=1000-10p and the market supply curve is given by Qs=100+20p required.
i) Calculate the equilibrium price. (4 Marks)
ii) Calculate the equilibrium quantity. (2 Marks)
iii) Illustrate the concept of market equilibrium. (4 Marks)
A firm's profit function is What is the positive output level that maximizes the firm's profit for minimizes its loss)? What are the firm's revenue, variable cost, and profit? Should it operate or shut down in the short run?
Distinguishe between concept of economic of scale and diseconomies of scale by taking two different business scenarios and highlight the importance of these two concepts. Identify different sources of internal and external economies of scale and diseconomies of scale in the online business? Give two three line explanation of each source.
The following statements (entirely fictitious) describe events which occurred on markets for specific goods. You are asked to predict the impact of these events on the equilibrium price and quantity and analyze the changes in these markets step by step. Your explanation must be based on and supported by appropriate supply and demand graphs paying particular attention to labels (identifiers), to the direction of the shift in any curve and to the changes in the equilibrium prices and quantities if any.
a) The Canadian (Ottawa?) beaver tail market. An American campaign strongly urges beaver tail consumers around the world to boycott our world famous beaver tails. [10 points]
b) The computer chip market. The demand for personal computers increases as consumer incomes increase and preferences shift (everyone wants to surf the WWW). At the same time, computer chip production costs decrease significantly due to the invention of new materials. [10 points]
Assume that the
demand for good X has a for that can be expressed by De following equation: X = 5000 - 20p- + 100py - 2L According is a research we know that
demanded the price of
good X and L is 10 and the income is 400. can be said that in lems
of income elashoy the good is a normal good?
The following data of mixed cost of variable cost are from the firm based in a perfectly competitive market. The market price for the firms’s product is $600.
output FC VC TC TR PROFIT /LOSS
0 $400 $0
1 $400 $400
2 $400 $720
3 $400 $1200
4 $400 $1760
5 $400 $2400
6 $400 $3120
a. Examine information given in the above table and complete this table
b. Demonstrate the rate at which the firm is maximizing the profit or minimizing the loss?
c. Calculate the average revenue and marginal revenue at each level of output?
d. What can you say about the relationship between marginal revenue and marginal cost at profit maximization level of output.
