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Industry studies often suggest that firms may have long-run average cost curves that show some output range over which there are economies of scale and a wide range of output over which long-run average cost is constant; finally, at very high output, there are diseconomies of scale.
a. Draw a representative long-run average cost curve, and indicate the minimum efficient scale.
b. Would you expect that firms in an industry like this would all produce about the same level of output? Why?
Describe how an increase in the American demand for Chinese goods leads to a change in the Chinese yuan relative to the U.S. dollar.
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Suppose that P = 400 - 20Q and that there are 3 firms, each with a marginal cost of 30. Suppose that firms 2 and 3 merge. The merger allows the combined firm to lower its marginal cost to 20. Does the merger lead to a higher or a lower cournot equili..
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a monopolist has determined that marginal revenue is 2.00 and average cost is 1.75. it has also determined that the
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The cost function for gumballs is given by TC = q(2v+w), where q is the output of gumballs (in thousands), v is the hourly rental rate for gumball presses, and w is the hourly wage.
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Early this year, thousands of Americans flocked to Apple's outlets to purchase iPad 2 sold by iconic brand. Long queues snaked outside many of Apple's outlets dotted over the states.
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