No cost function has been provided. Please see attached. (e) Now suppose that the industry makes a one-time investment for $K amount ofdollars to innovate in a new technology of production that allows every firm toreduce its cost of production to a 1/4 fraction of the previous cost. What isthe new total surplus of the economy? Who is benefiting the most from theindustry innovation?(f) Is it reasonable to assume that in the long-run $K is exactly equal to the size ofthe industry profits? why? Tech firms produce goods and services from labor and energy. The total cost indollars to produce y amount of goods and services for each firm j is c;(y;) = y?.There are 100 identical tech firms which all behave competitively.(a) What is the individual supply of technological goods and services?(b) What is the market supply of technological goods and services?(c) Suppose the demand curve for these goods is D(p) = 200 – 50p. What is theequilibrium price and quantity sold?(d) How much is the total surplus of this economy?

(a) What is the individual supply of technological goods and services? (b) What is the market supply of technological goods and services? (c) Suppose the demand curve for these goods is D(p) = 200 – 50p. What is the equilibrium price and quantity sold?

(a) What is the individual supply of technological goods and services? (b) What is the market supply of technological goods and services? (c) Suppose the demand curve for these goods is D(p) = 200 – 50p. What is the equilibrium price and quantity sold?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter19: Externalities And Public Goods

Section: Chapter Questions

Problem 19.1P: A firm in a perfectly competitive industry has patented a newprocess for making widgets. The new...

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