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1. Daybreak Juice Agency sells its output in a splendidly aggressive
market. The company’s complete worth function is given throughout the following
schedule:
Output
Entire Worth
(Objects)
($)
zero
50
10
120
20
170
30
210
40
260
50
330
60
430
Entire costs embrace a “common” return on the time (labor
suppliers) and capital that the proprietor has invested throughout the company. The prevailing
market value is $7 per unit.
a. Put collectively marginal worth schedule. (three Marks)
b. What is the firmâs income maximizing output stage? (2 Marks)
Hint:Please verify with Questions 2 and 4 Tutorial 6 which is alsoP10.2 p.406 of your prescribed textbook.%20Test%202.%20Data%20Options.docx#_ftn1″ title=””>[1];
And Homework 1 should additionally present you easy methods to.
2.
A company producing hockey sticks has a
manufacturing function given by:.png”>. In
the temporary run, the firmâs amount of capital gear is mounted at okay= 100. The
rental price for Okay is v= $1, and the wage price for L is w = $4.
a. Calculate the firmâs brief-run complete worth curve. (1 Mark)
b. Calculate the brief-run frequent worth curve. (1 Mark)
Hint:
This question is strictly the an identical question collectively together with your homework 4, the one
distinction I gave you the actual value of w=4 which you didnât have for the
homework. One would have anticipated that utility of the thought should be
easy and straight forward. I posted the reply to this homework successfully sooner than the
verify; which should have made your analysis and revision lots less complicated.
three. In a relentless worth commerce having zero marginal costs, the inverse
demand function is given by P=12-Q. Estimate the equilibrium value of the worth
and output for:
a. Monopoly. (1 Mark)
b. Cournot Duopoly. (2 Marks)
c. Glorious Opponents. (1 Mark)
Hint:
For Monopoly and Glorious Opponents, please
verify with Tutorial 7 Question 2 which may be P12.5 p.495 of your
prescribed textbook; this question compares monopoly versus aggressive market
equilibrium; moreover verify with questions three and 4 of the an identical tutorial.
For Cournot Duopoly we did quite a lot of questions;
in Class we reworked occasion on net web page 513 of your textbook (and I requested you to
do the an identical at your particular person time); then all through Tutorial eight we did questions 1
and a few which may be P13.6 p.542 of your prescribed textbook
4. Acknowledge each of the following statements as being true or false
and make clear why.
a.
A set of strategies
constitutes Nash equilibrium if no participant can improve their place given the
strategies chosen by completely different players.(1 Mark)
b.
A protected method is
very conservative and will solely be thought-about if the rivalâs optimum method
is comparable.(1 Mark)
c.
A dominant method
is usually a protected method, nonetheless every protected method simply is not primarily a
dominant method.(1 Mark)
d.
In a one-shot sport,
the Nash equilibrium may be the perfect consequence which may be achieved beneath
collusion.(1 Mark)
Hint
These questions bought right here straight out of your textbook
and we outlined just a few of those concepts if not all of them all through tutorial 10; I
did emphasise the need to have a clear understanding of all key concepts of
Sport Precept. On the end of Sport Precept Topic, Chapter 14 of your prescribed
textbook there is a one net web page summary which defines all these key concepts.
END OF TEST PAPER
[1]Mark Hirschey and
Bentzen M. (2014), Managerial
Economics, 13th model
