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Demand & Supply

Labor, cost function

A firm has a cost function given by the following: c(w1, w2, y)= w1w2y^2/(w1+w2) where the wi's are the prices of the factors (inputs) x1 and x2 respectively, and y is output. a) Is this a legitimate cost function? b) Find the firm's production function, y= f(x1, x2). c) From the cost function derive the firm's

Market Power

The Ali Baba Co., is the only supplier of a particular type of Oriental carpet. The estimated demand for its carpets is Q= 112,000 - 500P + 5M Where Q = number of carpets, P = price of carpets (dollars per unit), and M = consumers' income per capita. The estimate average variable cost function for Ali Baba's carpets is AVC

Economics: Given the demand for and the supply of a commodity that you yourself consume on a regular basis, i.e., I might choose coffee, what price will be the equilibrium price of this commodity?

1. Given the demand for and the supply of a commodity that you yourself consume on a regular basis, i.e., I might choose coffee, what price will be the equilibrium price of this commodity? Explain why this price will tend to prevail in the market and why higher (lower) prices, if the do exist temporarily, will tend to fal

Supply and Demand -1.The demand for erasers (Q) is given

1.The demand for erasers (Q) is given as follows: Q = 240 - 4Pe + 2M + 1Pb + 1A , where Pe is the price of erasers, M is the level of income, Pb is the price of another (related) good, A is the level of advertising. Suppose that Pe = 10, Pb = 10, A = 10, and M = 20. a. What is the price elasticity of demand of erasers?

Perfect Competition

Is the agricultural industry perfectly competitive? Use economic rationale to explain why or why not?

Opportunity Costs and Perfect competition

Problems: 1. Explain how opportunity cost is related to the producer's supply curve. 2. Explain why the minimum price necessary rises as the producer produces more output. 3. Define profit. 4. What are the assumptions of a perfectly competitive market. 5. Describe the demand curve faced by the individual firm. D

Studying behavior of substitutes

Suppose gasoline and hybrid vehicles are substitutes. On the back, draw a graph indicating what will happen in the market for hybrid vehicles if the price of gasoline increases. Be sure to label your graph carefully, putting Price on the vertical axis and Quantity on the horizontal axis. You do not need to have actual numbers

Calculating Equilibrium Prices and Quantity

Suppose the demand for guitars in State College is given by Qd = 9000 - 12P where Qd is the quantity demanded, and P is the price of guitars. Also, suppose the supply of guitars is given by Qs = 9P - 3852, where Qs is the quantity supplied of guitars. a)Calculate the equilibrium price of guitars and the equilibrium quantity

Supply and Demand/Equilibrium Quantity and Price

I have read the material for Chapter 3: "Supply and Demand" located in Michael Parkin's book titled, "Economics" (8th ed.). From my readings, I understand that as the prices rises supply increases. I also understand that as demand increases supply increases. However, I have trouble understanding the concepts concerning equilibri

Effect on supply, equillibrium price & quantity in short-run

For each of the following changes, show the effect on the supply curve, and state what will happen to market equilibrium price and quantity in the short run. a. The government requires pollution control filters that raise production costs. b. Wages of workers in this industry fall. c. There is an improvement in technology

Demand and Supply Linear functions

The following relations describe monthly demand and supply for a computer support service catering to small businesses: Qd=3,000 -10 P Qs=-1,000+ 10P where Q is the number of businesses that need services and P is the monthly fee, in dollars. a) At what average monthly fee would demand equal zero? b) At what av

Supply and demand

Joy's frozen yogurt shops have enjoyed rapid growth in northeastern states in recent years. From the analysis of joy's various outlets, it was found that the demand curve follows this pattern. Q=200-300P+120 I +65T-250Ac+400 Aj Q= number of cups served I= per capita income T= average outdoor temperature Ac= competition's m

Perfect Competition

Several theories of direct investment highlight firm-- specific and/or home-country-specific advantages that enable a multinational corporation (MNC) to compete against host-country firms that typically are more familiar with the local business environment and do not have high costs associated with operating a project or subsidi

Compute the number of units and the unit price

Consider a market characterized by the following inverse demand and supply functions: PX = 10 - 2QX and PX = 2 + 2QX? Compute the number of units and the price at which those units will be exchanged when there is an $8 per unit price floor.

Equilibrium price

1. Suppose the government wishes to spur the production of soybeans for their potential usage in making biodiesel in order to reduce our dependence on foreign oil. Further suppose that the market demand and supply for soybean oil are given by QD = 100 - P and QS = 50 + .3P, where Q = barrels of soybean oil, and P = price per ba

Microeconomics - Demand and supply

Assume that the perfectly competitive widget industry consist of exactly 1,000 firms and is initially in a long run equilibrium. Assume that the widget industry is a constant cost industry and, for simplicity, assume that there is only one plant size available. Subsequently, a permanent increase in price of a gadget (a substitut

Demand Theory - Hanover Manufacturing Company

The Hanover Manufacturing Company believes that the demand curve for the product is: P= 5-Q, where P is the price of its product (in dollars) and Q is the number of millions of units of its product sold per day. It is currently charging a price of $1 per unit for its product. A. Evaluate the wisdom of the firm's pricing polic

Differentiating between Market Structures

Need some assistance in summarizing the content of this simulation according to the following questions: (at least 700 words) 1. What are the advantages and limitations of supply and demand identified in the simulation 2. Select an organization and identify the market structure for the organization. 3. Analyze how or


Could you identify and describe the concepts of scarcity and opportunity costs. Also, explain the laws of supply and demand and how they are related to the concepts of scarcity and opportunity costs in decision-making. Finally give me something other then a text book definition on market equilibrium and explain how it is determi

Price Discrimination - Quantity Discounts

I can't find anywhere in my textbook a "direct" answer to this question. I tend to think that it's neither true nor false, because quantity discounts can be a form of price discrimination under certain circumstances. I guess I just need confirmation. Can someone please give me guidance on this question? "Quantity discounts