Download Econ 1100 Problem Set 5: Firm Supply and Monopoly - Prof. Lise Duedal Vesterlund and more Assignments Microeconomics in PDF only on Docsity!
Econ 1100 Name:________________ Professor Lise Vesterlund Group members:________
Problem Set 5
Due Tuesday November 4
Ch. 22 Firm Supply Problem 1. A competitive firm has a short run cost function c(y)=y 2 + a. What is firm’s fixed cost of production?
b. What is the firm’s variable cost?
c. What is the firm’s average variable cost?
d. What is the firm’s marginal cost?
e. Illustrate the firms marginal cost, average variable cost, and supply curves in the graph below (be sure to label the axis)
f. If the market price is $8 how much does the firm choose to produce? What are the associated revenue, costs and profit of production?
g. If the market price is $4 how much does the firm choose to produce? What are the associated revenue, costs and profit of production?
Ch.24 Monopoly Problem 2: Suppose the market demand is p=12-y and the monopolist’s cost function is c(y)=0.5 y^2. a. Illustrate the demand curve, and the firm’s MR and MC curves on the graph below. p
13
11
9
7
5
3
1
1 3 5 7 9 11 13 y
