Explain graphically how difference in demand and supply conditions between two hypothetical countries that produce wheat and cloth will lead to trade between the countries
Suppose that the production function of the firm is:
Q = 100L1/2.K1/2
K= 100, P = $1, w = $30 and r = $40. Determine the quantity of labor that the firm should hire
in order to maximize the profits. What is the maximum profit of this firm?
Describe how long run equilibrium of monopolistically competitive firm achieved according to:
A) equilibrium with price competition model
B) equilibrium with entry and exit of firms model