S 2 16. Consider an industry with n firms with outputs y¹,..y", facing an input price vectorW = (w₁,..wn). The total industry output is Y =1. The firms' cost functionsare Ci(w, y¹) a(w) +0¹ (w) [y] (to avoid confusion, note that [y] is y to thepower 3), j = 1..n, where a (w) and (w) are functions of input prices. The industryE-1 C (w, y). When can the aggregate costs be written assome function of input prices and total industry output (namely, when can it be writtenas C = a(w) + 0(w)Y)?aggregate costs are C(a) when a, (w) = 0 for all firms(b) when 0¹ (w) is the same (0¹ (w) = 0(w)) for all firms(c) when 3 = 1 for all firms(d) when 3 = 1 and 0¹ (w) = 0(w) for all firms==

When a firm produces a good or service, it employs various resources/inputs. Each input has to be…

Consider an industry with n firms with outputs y¹,..y", facing an input price vector W= (W1₁,..wn). The total industry output is Y = 19. The firms' cost functions are Ci(w, y) = a(w) + 0¹ (w) [y] (to avoid confusion, note that [y] is y to the power 3), j = 1..n, where a (w) and (w) are functions of input prices. The industry aggregate costs are C = -1 C (w, y). When can the aggregate costs be written as some function of input prices and total industry output (namely, when can it be written as C = a(w) + 0(w)Y)? (a) when a; (w) = 0 for all firms (b) when (w) is the same (0 (w) = 0(w)) for all firms (c) when 3 = 1 for all firms (d) when 3 = 1 and 0¹ (w) = 0(w) for all firms

Consider an industry with n firms with outputs y¹,..y", facing an input price vector W= (W1₁,..wn). The total industry output is Y = 19. The firms' cost functions are Ci(w, y) = a(w) + 0¹ (w) [y] (to avoid confusion, note that [y] is y to the power 3), j = 1..n, where a (w) and (w) are functions of input prices. The industry aggregate costs are C = -1 C (w, y). When can the aggregate costs be written as some function of input prices and total industry output (namely, when can it be written as C = a(w) + 0(w)Y)? (a) when a; (w) = 0 for all firms (b) when (w) is the same (0 (w) = 0(w)) for all firms (c) when 3 = 1 for all firms (d) when 3 = 1 and 0¹ (w) = 0(w) for all firms

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.2P

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