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General Equilibrium

Market Equilibrium in Perfect Competition

1.Use the following to demonstrate why a firm producing at the output level where MR=MC will also be able to maximixe its total profit. ( ie be at the point where marginal profit is equal to zero P=170-5Q TC+ 40= 50Q + 5Q2 please show the steps 2.In a perfectly competitive market a firm had to be either "good or lucky" expl

Monopolistic competition and Oligopoly

Pricing by monopolistic competition. I need assistance on the following problem. I have completed the assignment; however, not sure that my answers are correct. Game Theory. Suppose there are only two automobile companies, Ford and Chevrolet. Ford believes that Chevrolet will match any price it sets, but Chevrolet too is in

Impact of Changes in MPC on Equilibrium GDP

A. Suppose that the economy starts at equilibrium and the mpc= 0.75. What would be the effect of a $300 increase in government spending once all the rounds of the multiplier process are complete? b. suppose that the economy starts at equilibrium and the mpc = 0.8. What would be the effect of a 300 increase in taxes onc

GDP and Net Exports

Answer the following questions based on the following information: Please provide a step by step explanation. See table with data: a. i. Compute the GDP ii. Compute the net exports b. Assume the government cuts its purchases by $120 billion. As a result, the budget deficit is reduced by

Duopoly decisions of production

Duopoly decisions to produce In the duopoly, two rail transport firms compete by choosing a quantity of production simultaneously . The inverse market demand function of rail transport is expressed by p = 18 - q, where q = q1 + q2 . The production costs of the both firms are identical, for the Firm 1 costs are c1 = 0.5q12 a

Analyzing Price and Non-Price Factors

See the attached file. Illustrate each of the following events using a demand and supply diagram for bananas -Reports surface that imported bananas are infected with a deadly virus. -Consumers incomes drop. -The price of bananas rises. -The price of oranges falls. -Consumers expect the price of bananas to

Nash and multiple equilibria

Assume two high-tech companies, X and Y, are the only producers of a new product that is used my numerous computer manufacturers. The total demand for the new product is fixed and the price is set. Each firm's market share and profits are a function of the size of its advertising and promotional campaigns. If the two firms eng

Equilibrium in the one-shot prisoners' dilemma

In any strategic game: a. different strategies result in different payoffs. b. each player is aware of all prior moves. c. the allocation of positive payoffs is an equilibrium outcome. d. multiple equilibrium outcomes are stable.

Finding Equilibrium Level of Output

The following equations describe the commodity market: C= 100+0.9*DI (1), DI= Y-T (2), T= 0.2*Y (3), I=140 (4), G=200(5), X=200+0.18*Y (6), IM=100 (7), Y=C+I+G(X-IM) (8) A. Determine the equilibrium level of output B. Suppose that government spending increases by 20 units. Determine the change in the equilibrium level o

Protective Tariffs in Competitive Market Equilibrium

In the United States, steel production has remained constant since the 1970s at about 100 million tons per year. Large integrated companies, like U.S. Steel, remain important in the industry, but roughly 50 percent of domestic production is now produced by newer, nimble, and highly efficient mini-mill companies. Foreign imports

Question is based on the LM and IS schedules

SUPPOSE THAT C = 60 + 0.8 Yd, I = 150-10r, G= 250, T = 200, Ms = 100, Md = 40 + 0.1Y - 10r 1.a. write the equations for the IS and LM schedules. b. Find the equilibrium values for income (Yo) and the interest rate (Ro) 2. suppose we change the model in problem 1 such that investment is assumed to be completely interest

General equilibrium and economic efficiency

An economy produces outputs X and Y using inputs L and K. Which of the following is NOT required for economic efficiency? a. MRTSLK = MRSXY for all producers and consumers. b. MRTXY = MRSXY for all producers and consumers. c. MRSXY is equal for all consumers. d. MRTSLK is equal for all producers. e. None of the above i

Short and Long Run Equilibrium Price and Output Level

The Amber Corporation total cost function (where TC is the total cost in dollars and Q is quantity) is TC = 200 + 4Q + 2Q^2 a. If this firm is perfectly competitive and the price of its product is $24, at what quantity will the firm choose to produce? b. Does the answer represent a short-run equilibrium or a long

Microeconomics

I need some help on the below detailed, not much required approx 350 words.... A firm finds there is a sudden increase in the demand for its product. In the short run, it must operate longer hours and pay higher overtime wage rates. In the long-run, however, the firm can install more machines and operate them for various peri

Airport Oligopoly - Price Increase - Demand shifts

Compiling research to support MBA Econ Research paper. Any help greatly appreciated. There are 3 major airports within South Florida. Given this is airport oligopoly structure. If 1 airports operating expenses are increased, thus resulting in costs being passed on to the consumer - 1. What impact will it have on the consum

Supply and demand

How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is do price and quantity rise, fall, remain unchanged, or are the answers indeterminate, depending on the magnitudes of the shifts in supply and demand? You should rely on a supply and de

Market Structure: Perfect Competition

Draw graphs showing a perfectly competitive firm and industry in long-run equilibrium. a). How do you know that the industry is in long-run equilibrium? b). Suppose that there is an increase in demand for this product. Show and explain the short-run adjustment process for both the firm and the industry. c). Show and expl

Equilibrium Output in a Duopolist Market

Assume that 2 companies(C and D) are duopolists that produce identical products. Demand for the products is given by the following linear demand function: P=600-Qc-Qd Where Qc and Qd are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are TCc=25,000 + 10

Profit max, average cost, long-run equilibrium...

Please help with the following problem. Provide step by step calculations for each problem. 1. The Alpha Company is a member of the lamp industry, which is perfectly competitive. The price of a lamp is $50. The firm's total cost function is: TC = 1,000 + 20Q +5Q² Where TC is the total cost (in dolla

Findind Equilibrium for Strategic Game

The manager of a corporate division faces the possibility of an audit every year. She prefers to spend time preparing if she will be audited; otherwise, she would prefer to invest her time elsewhere. The auditor, who gets recognized for uncovering problems, prefers to audit unprepared clients. If the players match their act

Economics and Perfect Competition

You are a manager of a small US firm that sells nails in a competitive market (the nails are a standardized commodity; stores view your nails as identical to those available from hundreds of other firms). You are concerned about two events you recently about through trade publications: (1) The overall market supply of nails wi

In the following problem you need to determine whether a threat by an incumbent firm is credible and if it will deter a would be entrant, establish a way to make the threat be made credible, and demonstrate the process of backward induction to find an equilibrium.

Maytag wants to prevent Whirlpool from entering the market for high priced, front load washing machines. Front load washing machines clean clothes better and use less water than conventional top load machines. Even though front load machines are more costly to manufacture than top loaders, Maytag is nonetheless earning economi

Profit maximization

Given the following Demand & Supply functions: Qd = 25 – P Qs = 10 + 2P a – What is the equilibrium values of P and Q? Now suppose the demand function changes to: Qd = 10,000 – 2P If Total Cost function is: TC = 5000 + 50Q b - Find the Profit – maximizing Quantity and Price. c – Find the firm’s profit