Which returns to scale will an efficient firm choose? What market structure has no loss in long run? What production function shows the maximum quantity of goods or services that can be produced with a set of inputs assuming one of the inputs used remains unchanged? Capacity planning refers to adjustment in production considering the what? What can destroy monopoly position?

Which returns to scale will an efficient firm choose? What market structure has no loss in long run? What production function shows the maximum quantity of goods or services that can be produced with a set of inputs assuming one of the inputs used remains unchanged? Capacity planning refers to adjustment in production considering the what? What can destroy monopoly position?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter19: Externalities And Public Goods

Section: Chapter Questions

Problem 19.1P: A firm in a perfectly competitive industry has patented a newprocess for making widgets. The new...

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A firm in a perfectly competitive industry has patented a newprocess for making widgets. The new process lowers the firm’saverage cost, meaning that this firm alone (although still aprice taker) can earn real economic profits in the long run. a. If the market price is $20 per widget and the firm’s marginalcost is given by MC=0.4q , where q is the dailywidget production for the firm, how many widgets willthe firm produce? b. Suppose a government study has found that the firm’snew process is polluting the air and estimates the socialmarginal cost of widget production by this firm to be. If the market price is still $20, what is thesocially optimal level of production for the firm? Whatshould be the rate of a government-imposed excise tax tobring about this optimal level of production? c. Graph your results.
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Question 15 (i) Which of the following is(are) correct about how accountants and economists consider costs? Accountants consider only implicit costs Economists consider both explicit and implicit costs A: 1 only B: 2 only C: Both 1 and 2 D: Neither 1 nor 2 (ii) Which of the following statements is(are) correct for a monopoly firm and a competitive firm? Both firms earn economic profit in the long run. Both firms aim to maximize profit and produce at P = MC. A: 1 only B: 2 only C: Both 1 and 2 D: Neither 1 nor 2
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Assume a competitive industry is initially at its long-run equilibrium, given the inverse market demand and supply functions:p = 25000 − 0.2qd ??? Qs = 5000 + 0.3qsIf all firm in this market have identical cost structures:a) How many firms operate in this market at this point? b) What is the profit maximizing quantity produced by each competitive firm?
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