What kind of technology does the firm have in terms of returns to scale? Why? Suppose that the capital input is fixed at K = 16. Derive the conditional factor demand for labor and the cost function. Does the firm have the economies of scale? Why or why not? Suppose that both inputs are variable. Derive the conditional factor demands for labor and capital, and the cost function. Does the firm have the economies of scale? Why or why not? B. Suppose that the capital input is fixed at K = 16. Derive the supply curve (inverse supply function) and explain why it has such a shape. Suppose that there are 100 firms (who have the same technology of y = LEK) in the market. What are the (short-run) equilibrium price and output each firm sells? How much profit (or loss) does each firm have? Explain your answers (about the short-run equilibrium) using graphs. What will happen in the market price

What kind of technology does the firm have in terms of returns to scale? Why? Suppose that the capital input is fixed at K = 16. Derive the conditional factor demand for labor and the cost function. Does the firm have the economies of scale? Why or why not? Suppose that both inputs are variable. Derive the conditional factor demands for labor and capital, and the cost function. Does the firm have the economies of scale? Why or why not? B. Suppose that the capital input is fixed at K = 16. Derive the supply curve (inverse supply function) and explain why it has such a shape. Suppose that there are 100 firms (who have the same technology of y = LEK) in the market. What are the (short-run) equilibrium price and output each firm sells? How much profit (or loss) does each firm have? Explain your answers (about the short-run equilibrium) using graphs. What will happen in the market price

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section: Chapter Questions

Problem 3PA

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