Question (1): Location Choice of Transfer-Oriented Firms Suppose a transport cost-oriented firm consumes four inputs (I₁ to 14) in order to produce one output, which is consumed at the output market M. Points H₁ and H₂ are transportation hubs.
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Assume M's monetary weight equals $4. The monetary weight for 1, and 1, is $2 each; the monetary weight for I, and 1, and is $3 each. Where, if any, is the Nash Equilibrium?
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- Economics Apply the cost-volume- utility model for the graphical and mathematical definition of the equilibrium point. A company dedicated to the manufacture of its only product, a waterproof bluetooth speaker, presents the following information: Annual fixed costs: $1,500,000 Variable costs per unit: Housing: $20.- Buttons: $5.- Card: $10.- The sale price is calculated based on a desired marginal contribution of 60%. Calculate the equilibrium point in units and weights of the company, Draw up the corresponding graph, Prepare the status of results as a check.Apply the cost-volume- utility model for the graphical and mathematical definition of the equilibrium point. A company dedicated to the manufacture of its only product, a waterproof bluetooth speaker, presents the following information: Annual fixed costs: $1,500,000 Variable costs per unit: Housing: $20.- Buttons: $5.- Card: $10.- The sale price is calculated based on a desired marginal contribution of 60%. Calculate the equilibrium point in units and weights of the company, Draw up the corresponding graph, Prepare the status of results as a check.Constrained Optimization using Lagrange Multiplier: Cost MinimizationA clothing company produces two goods namely pants (P) and sweaters (S) whose combined cost function is C = 6P2 + 10S2 − PS + 30.In a day, the clothing company is limited by a production quota of 34 units of output only. Inequation form: P + S = 341. State the cost minimization problem of the clothing company.2. Set-up the Lagrange equation and determine the quantity of pants (P) and sweaters (S) that the firm should produce daily to minimize cost.3. What is the effect on cost if the company decides to increase the production quota by 1 more unit?
- Asap In a perfectly competitive market, the market price of a toy is $100, with labour costs of $5 and capital costs of $8. The Cobb-Douglas function is below, Q = K0.2L0.5 A ) Find the profit-maximizing quantity Q and its associated profit using the Lagrangian multiplier approach. B) To ensure that the firm maximises profit, how would you develop the objective function, constraint, and Lagrangian?Constrained Optimization using Lagrange Multiplier: Cost MinimizationA clothing company produces two goods namely pants (P) and sweaters (S) whose combined cost function is C = 6P2 + 10S2 − PS + 30.In a day, the clothing company is limited by a production quota of 34 units of output only. Inequation form: P + S = 341. State the cost minimization problem of the clothing company.1. A firm is said to be earning normal profit whenever:A. Accounting profit is zero.B. Economic profit is positive.C. Accounting profit is positive.D. Total revenue equals explicit and implicit costs.2. If a 10% increase in inputs results in a 20% increase in output, then the firm is said to exhibit:A. Diseconomies of scaleB. Diminishing marginal returns to scaleC. Constant returns to scaleD. Economies of scale3. Economists have traditionally attempted to avoid the trap of:A. Thinking in terms of total utility.B. Computing marginal utilityC. Making interpersonal utility comparisons.D. None of the above.4. According to the water-diamond paradoxA. Water has a lower MU than Diamond.B. Water has a higher TU than Diamond.C. Prices reflect MU and not TUD. All of the above.
- Question You are the manager of a firm and you are required to optimize the Cobb Douglas function given the following parameters. The maximum amount of money available is$1600 where the price of K = 12 and the price of L=6. That is PK=12 and PL=6. The function is given as q=K0.4+L0.6. What is the constraint equation? a. none of the above b. 12K - 6L = 1600 c. 12K/6L = 1600 d. 12K+6L=1600Apply the cost-volume- utility model for the graphical and mathematical definition of the equilibrium point. A company dedicated to the manufacture of its only product, a waterproof bluetooth speaker, presents the following information: Annual fixed costs: $1,500,000 Variable costs per unit: Housing: $20.- Buttons: $5.- Card: $10.- The sale price is calculated based on a desired marginal contribution of 60%. Draw up the corresponding graph.Recall the production modelMax 10x s.t 5x < 40 x > 0 Suppose the firm in this example considers a second product that has a unit profit of $5 andrequires 2 hours of production time for each unit produced. Use y as the number of units ofproduct 2 produced.1. Show the mathematical model when both products are considered simultaneously.2. Identify the controllable and uncontrollable inputs for this model.3. Draw the flowchart of the input–output process for this model 4. What are the optimal solution values of x and y?5. Is the model developed in part (a) a deterministic or a stochastic model? Explain
- Constrained Optimization: Cobb-Douglas Production Function A firm operates with a Cobb-Douglas Production function: Q = 12K 0.4L 0.4 where K is units of capital, and L is number of laborers. To produce an output, the firm must pay $40 per unit of capital, and $5 per laborer. However, the firm has a budget of $800 only to spend for labor cost and capital cost. 1. Using your knowledge of the tangency condition in Producer’s theory, find the combination of K and L that the firm should use to produce the maximum possible output. Do not solve the problem using the Lagrangian method. Note: The tangency conditions just states that the slope of the production function must be equal to the slope of the isocost function.Given TC = 120 + 50Q – 10Q2 + Q3Finda. The equations of the TVC, AVC, and MC functions.b. The level of output at which AVC and MC are minimum, and prove that the AVC andMC curves are U-shaped.c. Find the AVC and MC for the level of output at which the AVC curve is minimum.a) Derive the goods market demand curve in terms of the output (Y) and the exogenousvariables:c0,c1,b0,b1,g0,g1andT. Show your work for full credit. b)Draw the Goods Market Equilibrium. Be sure to label all curves, label the equilibrium point, and label the slope of each curve. c)Solve for the equilibrium output (Y) in terms of the exogenous variables:c0,c1,b0,b1,g0,g1andT. Show your work for full credit. d)Supposeg1increases, but stillc1+b1+g1<1. Using a graph of the goods market, show how we would represent an increase in the value ofg1on equilibrium output y. Be sure to label all axes, curves, and equilibrium points. e)Suppose instead,c1+b1+g1= 0. Is the equilibrium in the goods market still possible? If so, what is the equilibrium output? You must explain your answer to receive full credit.