Suppose there are 1000 identical wheat farmers. For each, TC = 10 + q2 Derive the market supply curve
What will be an ideal response?
For each MC = 2q and AVC = q. Thus MC > AVC for all levels of output. The firm sets p = 2q or q = 0.5p. Since there are 1000 firms each producing q, market supply equals Q = 500p.
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The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. At Kaffenia's efficient quantity of doughnuts
A) total consumer surplus is zero. B) total producer surplus is zero. C) consumer surplus exceeds producer surplus by the greatest possible amount. D) the sum of consumer surplus and producer surplus is maximized.
To reduce the principal-agent problem
A) boards-of-directors can tie the salaries of top management to the profitability of the firm. B) managers can inflate profits on financial statements. C) managers can take on more risk than they disclose to investors. D) managers can hide liabilities by not disclosing them on financial statements.
The production possibilities frontier illustrates
a. the combinations of goods that could be produced with resources and technology constant b. how technology influences opportunity costs c. the law of diminishing returns d. how price changes affect decision making of individuals e. the law of demand
A decrease in population would shift the demand curve to the left.
Answer the following statement true (T) or false (F)