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Question in computer science sir solve this problem and provide me correct solution I ' m in very hurry... Question 1 Consider the following production
Question in computer science sir solve this problem and provide me correct solution Im in very hurry...
Question Consider the following production function:
where and are the amount of labour and capital used in the production process, and is the output. Throughout this question, the output price is and the rental rate of capital is
We will first consider a firm in the short run, where the amount of capital is fixed at The fixed cost is therefore
aLevel A Is there diminishing returns to labour? Explain.
bLevel A Suppose the wage rate is Find the profitmaximising choice of Calculate the profitmaximising output level and the maximised profit. There is no need to check the second order condition but of course you can check if you want to
cLevel A Now suppose increases to Find the profitmaximising choice of Calculate the profitmaximising output level and the maximised profit. There is no need to check the second order condition. You can leave your answers in square roots.
dLevel A What is the change in when increases from to in the short run? You can leave your answers in square roots.
Question marks
A mass of consumers is uniformly distributed along the interval Two firms, A and B are located at points and respectively. We denote by the price of firm iinA, A consumer located at point xin obtains utility if he consumes from firm and if he consumes from firm B In the following, we assume that the groes utility is sufficiently high, so that the market will be covered and all consumets will get positive utility in equilibrium. Both firms have a cost function equal to where you should substitute for the last number of your student ID number.
a Find the demand function for both firms.
marks
b Assume firms set their prices simultaneously. Solve for the Nash equilibriuma prices, and compute the equilibrium profits. marks
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