Demand function of a competitive industry is : Px = 104 - Q where Q is total production of that industry. Production function for all firms at industry is q = L1/4K3/4. Wage per unit of labor (w) is 1 monetary unit and price per unit of capital (r) is 3. In short run in each of firms at industry there is a capital level of K=1. It is asked: (a) In short run, calculate all cost curves of any firm at industry. b) In short run, determine market equilibrium that makes profit of each firm zero as well as number (n) of firms that would produce is this situation and obtain supply curve of industry. d) In long run calculate all cost curves of any firm at industry
Demand function of a competitive industry is : Px = 104 - Q where Q is total production of that industry. Production function for all firms at industry is q = L1/4K3/4. Wage per unit of labor (w) is 1 monetary unit and price per unit of capital (r) is 3. In short run in each of firms at industry there is a capital level of K=1. It is asked: (a) In short run, calculate all cost curves of any firm at industry. b) In short run, determine market equilibrium that makes profit of each firm zero as well as number (n) of firms that would produce is this situation and obtain supply curve of industry. d) In long run calculate all cost curves of any firm at industry
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.3P
Related questions
Question
100%
Course: Microeconomics
Demand function of a competitive industry is : Px = 104 - Q where Q is total production of that industry. Production function for all firms at industry is q = L1/4K3/4. Wage per unit of labor (w) is 1 monetary unit and price per unit of capital (r) is 3. In short run in each of firms at industry there is a capital level of K=1.
It is asked:
(a) In short run, calculate all cost curves of any firm at industry.
b) In short run, determine
d) In long run calculate all cost curves of any firm at industry.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 7 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
