QUESTION 25 Refer to the information provided in Figure 12.4 below to answer the question(s) that follow. a. Industry X Price per unit of X (S) Price per unit of Y (5) p pl 0 0⁰0¹ b. Industry Y Q¹0⁰ D¹ Units of X 30 D¹ Units of Y Figure 12.4 There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of sº and Dº Refer to Figure 12.4. Currently in sector Y, price is greater than average cost. less than average cost. equal to average cost. More information is needed to answer the question.

QUESTION 25 Refer to the information provided in Figure 12.4 below to answer the question(s) that follow. a. Industry X Price per unit of X (S) Price per unit of Y (5) p pl 0 0⁰0¹ b. Industry Y Q¹0⁰ D¹ Units of X 30 D¹ Units of Y Figure 12.4 There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of sº and Dº Refer to Figure 12.4. Currently in sector Y, price is greater than average cost. less than average cost. equal to average cost. More information is needed to answer the question.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Firms In Competitive Markets

Section: Chapter Questions

Problem 10PA

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A firms marginal cost curve above the average variable cost curve is equal to the films individual supply curve. This means that every time a firm receives a price from the market it will be willing to supply the amount of output where the price equals marginal cost. What happens to the films individual supply curve if marginal costs increase?
May and Raj me the only two growers who provide organically grown corn to a local grocery store. They know that if they cooperated and produced less corn, they could raise the price of the com. If they work independently, they will each earn 100. If they decide to work together and both lower their output, they call each earn 150. If one person lowers output and the other does not, the person who lowers output will earn $1 and the other person will capture the entire market and will earn 200. Table 10.6 represents the choices available to Mary and Raj. What is the best choice for Raj if he is sole that Mary will cooperate? If Mary thinks Raj will cheat, what should Mary do and why? What is the prisoners dilemma result? What is the preferred choice if they could ensure cooperation? A = Work independently; B = Cooperate and Lower Output. (Each results entry lists Rajs earnings first, and Marys earnings second.)
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