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P = 100
2q
C = 50 + 20q
a)
Find out the profit maximizing price and output of the monopolist
firm
b)
Analyse the impact of a sales tax of Rs . 8 per unit on the monopolist
profit
wage and price as given. Derive the firm's short-run demand for labor as a function of w and p.
How much labor will the firm hire if W=Ã ¢ µ20 and P=Ã ¢ µ100?
Show that the quantity of labor(X1) and capital(X2) that a firm demands decreases with a factor’s own factor price (w for labor and r for capital) and increases with the output price (P) when the production function is a Cobb-Douglas of the form q=AX1αX2β
utility functionX, Y = Ln X + Y. The price of good Y is 1 and the price of good X is P.
(a) Derive Maryà ¢ s demand for X.
(b) Suppose the price of X fell from $1 to $0.50, calculate the substitution effect and
income effect for the change in X.
Suppose a firm produces according to the production function Q = 2L0.6K0.2, and faces wage rate ₵10, a rental cost of capital ₵5, and sells output at a price of ₵20.
a. Obtain and expression for the factor demand functions.
b. Compute the profit-maximizing factor demands for capital and labour.
If caesars salads become trendy at dinner parties. The dressing is made with butter. What is likely effect on the market for butter. Indicate in each case the impact on equilibrium price and equilibrium.
a) family farm
b) petty shopper
c)flower vendor
The estimated production function of a firm is Q = 100K0.7L0.4. The wage rate is Rs. 50 and rate of interest is Rs. 40.
i. Compute the marginal products of two inputs.
ii. Determine the amount of labor and capital that the firm should use in order to minimize cost of producing 1200 units of output. What is the cost of the firm?
iii. What will be the optimal employment of labor and capital in order to maximize output under given total cost of Rs. 1500?
iv. What is the degree of returns to scale depicted by the production function?
Table 1 below, shows the output of 6 machinists in the sewing section of the business on a daily basis. Use this information to explain, and illustrate numerically, the law of diminishing returns to Mrs Samuels. In your explanation, you should also refer to the marginal product and average product of the machine operators.
