Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Business Economics Expert

Economics


Home >> Business Economics

A firm's production function is qi = 4*Ki.2Li.4. The wage rate in this area is w = $15, and the cost of capital is r = .05.

a. Find the firm's short run cost function, if Ki is fixed at $100,000.

b. If the good is exported around the world at a price of $100, what is the firm's optimal output, and what is its profit or loss? (We would describe this as "perfectly elastic demand" for this good)

c. Now suppose that the price is not known. Derive the firm's short run supply function qi (P). (hint, follow the same steps as in b, but replace the $100 value with the variable, P)

d. Now imagine that time passes, such that Ki can be adjusted to reflect market conditions. What is the firm's long run cost function? What is its long run supply function? How much would it produce if P=$100? What would be its profit or loss?

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M92187230

Have any Question?


Related Questions in Business Economics

I would like know what issues are in us about controlling

I would like know what issues are in US about controlling pharmaceutical costs related to healthcare delivery, economics and policy. Who are the stakeholders and what are their role and the cause and effect?

How will the dollar devaluation affect businesses and

How will the dollar devaluation affect businesses and consumers in the twin cities of El Paso, the United States and Juarez, Mexico?

A student recieves the grades shown below with an a worth 4

A student recieves the grades shown below, with an A worth 4 points, a B worth 3 points, a C worth 2 points, and a D worth 1 point. What is the students grade point average? A in 1 four - credit classes C in 1 three - cr ...

After paying 150 you are allowed to open a newspaper

After paying $1.50, you are allowed to open a newspaper vending machine freely (i.e. get as many as you want). In contrast, a soft drink vending machine only drops one can after you pay the same amount of money. Why? Ple ...

Since quotas do not raise revenues but have the same trade

Since quotas do not raise revenues but have the same trade effects as do tariffs, why not just have tariffs? Why would the government impose quotas when tariffs not only would reduce imports but also bring in new revenue ...

Consider the labor market of the telecom industry is

Consider the labor market of the telecom industry is originally at an equilibrium level E0 and w0. Assume that now the companies offer each employee an iPhone as employment benefit every year. The firms can get iPhone at ...

What role for governmentin chapter 3 wheelan describes a

What Role for Government? In Chapter 3, Wheelan describes a number of ways in which the "government is your friend" in a well-functioning society and economy. List and explain two ways that, in your everyday lives, there ...

Cheeseburger and taco company purchases 16935 boxes of

Cheeseburger and Taco company purchases 16,935 boxes of cheese each year. It costs $27 to place and ship each order and $8.17 per year for each box held as inventory. The company is using Economic Order Quantity model in ...

A box contains n white and m black balls one ball is added

A box contains n white and m black balls. One ball is added randomly, white with probability p and black with probability 1 - p. Then a random ball is taken out from the box. (a) Find the probability that the taken ball ...

Some people eg hayek argue that decentralization of

Some people (e.g Hayek) argue that decentralization of economic decisions in the economy lead to an efficient resource allocation. What differences exist within the firm that make the link between decentralization and ef ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As

Follow Us

© Copyright 2013-14 mywordsolution.com All rights reserved