Times New Roman laA v Econ 705 Module 5 Assignment 1. You collect the following production data for your firm: Q L a. Which functional form (linear, quadratic, cubic) is most 192 2 suitable to your data? Construct a scatter diagram but be sure 955 6 to just do the dots; don't include the lines that connect them. 506 3 Then, play around with the trendline feature and include what 67 1 you consider to be the best trendline. ,060 9 b. Using OLS, estimate the firm's short-run production function. 860 5 Comment on the strength of the regression results. 1,128 7 c. Calculate the Q, AP, and MP for L - 8 workers. 688 4 d. At 8 workers, is MC rising or falling, and how do you know? 629 11 929 10 2. BlueHoof@, the popular new startup company that manufacturers the world's first-ever Bluetooth- enabled horseshoe, estimated its short-run costs using a U-shaped average variable cost function of the form AVC a bQ cQ' and obtained the following results. Total fixed cost (TFC) at BlueHoofR is $920. Adjusted R Square 0.922 Standard Coefficients Error Stat P-value Intercept 35.36 2.64 13.42 0.0009 Q -3.64 0.58 -6.30 0.0000 012 0.25 0.03 9.35 0.0000 a. What level of output (Q) is associated with the minimum A VC? What is the value of A VC at this minimum? b. Determine equations for ATC, TC, and MC. Graph one scatterplot of Q vs. TC, and another scatterplot of Q vs. ATC, AVC, and MC. C . When output is 4, how much is TC, AVC, ATC, and MC? d. At what amount of output does labor change from exhibiting increasing returns to decreasing returns? 3. In the U.S., city governments usually grant a monopoly right to a single cable company to provide cable service to people in that city; i.e., if you want television service to your house delivered through coaxial or fiber-optic cable, there is only one company from which to choose. Our definition of perfectly competitive markets stressed three characteristics: 1) small firms each producing a small percentage of total output, 2) firms produce homogeneous products, and 3) easy entry and exit from the industry. Recent developments in the industry say, over the past decade) have made the cable market much more competitive. Present an argument why the cable industry may now satisfy each of these three criteria, even despite the obvious government-granted monopoly.i 4. Suppose the market demand and supply inctions are Q1) = 31,200 M 200P and Q5 = 400P + 6,000. You have just graduated and moved to this city; as a new MBA and an entrepreneur, you are considering entering the market for this product. a. Determine the equilibrium price and quantity in this market. . b. You've researched and found that most rms in the market currently experience costs such that TC = 760 + 96Q 3.3Q2 + 0.04Q3. Determine whether or not you should enter this market. Use graphs to support your answer. (Remember that you can Format Axis and change the Minimum and Maximum Bounds of your axes to \"zoom in\" to a graph in Excel.) 0. Due to unforeseen delays, you don't enter the market. However, a year later the market supply has changed to Qs = 400P 1,800. Are you surpiised at this shift in supply? d. Given the new supply conditions, determine whether or not you should enter the market