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A firm producing hockey sticks has a production function given by Y= \(2\sqrt{KL}\) in the short-run, the firm's amount of capital equipment is fixed at K = 100. The rental-rate of capital is $1, and the wage rate is $4.
(a) Derive the firm's short-run total cost function in terms of output.
(b) Calculate the firm's short-run average cost function (SRATC).
(c) Calculate the firm's short-run marginal cost function (SRMC).
(d) Graph the firm's SRATC and SRMC curve.
(e) Derive the firm's long-run total cost function in terms of output.
Calculate the Consumer Price Index in each year and calculate the inflation rate from 2010 to 2011 and then from 2010 to 2013 using the calculated CPIs.
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Suppose two strategically dependent firms in an oligopolistic industry: Firms A and B. Firm A knows that if it offers extended warranties on its products but Firm B does not,
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Attila (A) and Francis (F), live on Coconut Island and face the problem of determining the amount of military defense they need to repel a potential invasion from neighboring islanders. Defense is a jointly consumed pure public good. They agree to..
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A monopolist with two plants operates with a marginal revenue of 500-4Q and marginal costs of 4Q for plant 1 and 2Q for plant 2. Elucidate what are outputs at each plant to maximize profits.
Using the Demand and Supply model anpredict what could happen to demand or supply curves and to equilibrium price. Include the curves in response.
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