ProblemSet6-2009

# ProblemSet6-2009 - y = q x 2 1 x 2 2 The demand function is...

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Econ 6202, Fall 2009 Dmitry Shapiro Problem Set 6 Due Tuesday October 27 1. Suppose that the technology for producing q is identical for all ﬁrms. The cost function for a representative ﬁrm is given by c ( q ) = a + bq + cq 2 , where a > 0 ,b > 0, and c > 0. Find the long-run equilibrium price, and the quantity of output produced by each ﬁrm. 2. Consider an industry with 7 identical competitive ﬁrms. The production function of a representative ﬁrm is q = min { x 1 , x 2 } , where x 1 and x 2 are the inputs that the ﬁrm uses to produce output q . Suppose that the input prices are w 1 = 4 and w 2 = 3. The demand function is q D ( p ) = 48 - p . Assume that ﬁrms cannot enter or exit the market. Find the equilibrium price and quantity. Compute the proﬁt of each ﬁrm. 3. Consider an industry with identical ﬁrms and production function
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Unformatted text preview: y = q x 2 1 + x 2 2 . The demand function is q D ( p ) = a-bp , where a > ,b > 0. Compute the long run equilibrium number of ﬁrms in the market, and the quantity of output that each ﬁrm produces. 4. The demand curve for a good is q D ( p ) = 100-p , and the supply is q S ( p ) = 20 + 3 p . Compute the equilibrium price and quantity. Suppose that the government need to collect 308 in revenues. The gov-ernment can choose between a per unit tax on t on production and a per unit tax ˜ t on consumption. Find the values of t and ˜ t . If the government wants to minimize the dead weight loss, which tax should it choose? 1...
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## This note was uploaded on 10/20/2010 for the course ECON 6202 taught by Professor Shapiro during the Fall '09 term at UNC Charlotte.

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