ps5x313_s06 - a short-run total cost curve of the form:...

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1. Suppose x = min{L, K} and that w=$2 and r=$4. a. Find the 3 long run cost curves. b. Find the 7 short run cost curves assuming K=20. 2. Suppose x = L 2 K 2 and that w=$2 and r=$4. a. Find the 3 long run cost curves. b. Find the 7 short run cost curves assuming K=10. 3. Suppose x = L 1/2 K 1/2 and that w=$2 and r=$4. a. Find the 3 long run cost curves. b. Find the 7 short run cost curves assuming K=25. 4. Suppose x = L 1/2 K 1/3 and that w=$2 and r=$4. a. Find the 3 long run cost curves. b. Find the 7 short run cost curves assuming K=27. 5. Suppose x = L + K and that w=$2 and r=$4. a. Find the 3 long run cost curves. b. Find the 7 short run cost curves assuming you are stuck with K=5. 6. Suppose that there are 100 identical firms in a perfectly competitive industry. Each firm has
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Unformatted text preview: a short-run total cost curve of the form: tc(x) = (1/300)x 3 + 0.2x 2 + 4x +10. a. Assuming all fixed costs are sunk costs, calculate the firms short-run supply curve with x as a function of the market price P. b. Given there are 100 firms, calculate the short-run industry supply curve with X as a function of P. c. Suppose the market demand is given by X D = 8,000- 200P. What will be the short-run equilibrium price and quantity combination? That is, find the following: P*, X* and x*. d. Is this short-run equilibrium also a long-run equilibrium price and quantity combination? Why or why not? Econ 313.1 - Wissink Spring 2006 PS#5 XtraQ (corrected version) DUE: In class on Friday March 31...
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