EBK MICROECONOMICS
EBK MICROECONOMICS
13th Edition
ISBN: 8220106798652
Author: Arnold
Publisher: CENGAGE L
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Chapter 13, Problem 5QP
To determine

Reasons for the horizontal supply curve of the firm and upward sloping supply curve of an industry.

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Show that under perfect competition, profit maximization implies that firm’s demand for factor inputs are downward slopping and firm’s supply curve in the output market is positively sloping.
The graph shows the Cost curves for a profit maximizing firm in a competitive market. If the market price is $30 and the firm produces at the profit maximum quantity, what is the amount of the total fix cost
A firm's technology is characterized by a Cobb - Douglas production function of the form 1 1 y = f(K,L) = 2K² + 1² a. The output price is p, and the input prices are r and w for K and L, respectively. Set up the problem for a profit - maximizing firm and solve for the factor demand functions for K and L. b. Find the firm's supply function. c. Find the firm's profit function. d. Assume now that p = 2, r = 1, and w = 1. Using the functions you have found in parts (a), (b) and (c), calculate the profit - maximizing levels of the factors and (K* and L*), the profit - maximizing output level (v) and the maximum profit of the firm (). Please solve it by explaining and explaining.
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