Question
Q1. Consider a price-taking firm that produces output using one input accordingto the production function given byf(x)=4X^0.5If the price of the output is $80 per
Q1.
Consider a price-taking firm that produces output using one input accordingto the production function given byf(x)=4X^0.5If the price of the output is $80 per unit and the cost of the input is $40 per unit, how much profit will the firm make if it maximises profits?
$625
$323
$318
$1,284
$640
Q2.
The market demand function for papayas is D(p)=250-5p. The elasticity at p = $5 is equal to:
-1
-0.125
-1.25
0.5
-0.25
Q3.
The inverse demand function for cases of whiskey isPD(q) = 160 - 6qand the inverse supply function isPs(q) = 60 + 2q. Originally there was no tax on whiskey. Then the government began to tax suppliers of whiskey $27 for every case they sold. How much did the price paid by consumers rise when the new equilibrium was reached?
It rose by $22.25.
It rose by $29.
It rose by $18.
It rose by $16.
None of the above.
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