Microeconomics Answers

(e) What output should farmer 1 produce if he/she expects their rival to produce 20 units? [4] (f) Calculate the profits if farmer 2 decides to break the cartel agreement [4] (g) Does joining a cartel offer any benefits to both farmers? Justify your answer [4] (h) What if farmer 1 is a leader and farmer 2 a follower, determine the price, quantity and profits made by these two farmers. [8] 

Two dairy farmers produce milk for a local town with local milk demand given by (P denotes price measured in Rands, Q denotes the quantity measured in liters). Both farmers have the same cost function given by (where denotes output). (a) Determine the reaction function of each farmer. [8] (b) Find the Cournot-Nash equilibrium. [2] (c) Calculate profits for each farmer [2] (d) Suppose that both farmers decide to form a cartel, determine profits for each farmer under the cartel 

From the following total utility schedule

Qx 0 1 2 3 4 5 6 7

TUx 0 4 14 20 24 26 26 24

a. Derive the marginal utility schedule.

b. Plot the total and the marginal utility schedules.

c. Determine where the law of diminishing marginal utility begins to operate.

d. Find the saturation point.

comsumer consuming two goods x and y has utility function v=x➋+y➌.If the price of the two commodities 6 and 2 respectively and his budget is birr .40 find the quantites x and y which will maximize utility

Purchases made now to avoid higher future prices can lead to:

Estimate the monthly cost of your education in first semester in the university keeping both the explicit and implicit cost in view?

1. Why are price floors said to be inefficient? Can the government restore efficiency by imposing a production quota along with the price floor? Who benefits and who loses from such a program? ( Max.500 words)

Find the courtnot-Nash equilibrium

Estimate the monthly cost of your education in first semester in the university keeping both the explicit and implicit costs in view.