True or False: The law of diminishing marginal utility explains why short run production costs increase directly with a Firm's level of output.
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True or False: The law of diminishing
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- 3. Optimal inputs: A firm has a production function, y = ln(l, k) in a market with prices Py = 20, pe = 4, Pk = 5. Find the firm's profit maximizing choice for y, l, and k. How much profit do they earn?explain why a firm might want to produce its good even after diminishing marginal returns have set in and marginal cost is rising ?Input either "increase" or "decrease" where relevant: A decrease in the price of a complementary good will cause its complement’s equilibrium price to ...... and the equilibrium quantity to .....
- What term describes the decrease in general satisfaction a person gets from consuming. each additional unit of a product? A) Consumer Surplus B) Marginal Utility C) Marginal Cost D) Diminishing Returns\beta < 1. 16. A firm uses two inputs, X1 and X2, to produce a good that is described by the production function: Q = f (X1, X2) = X1/2X1/4 12 The firm sells its output at $80 per unit: P = $ 80. The cost of input 1, X1, is $4. The cost of input 2. X2, is $2. (a) Solve for the profit - maximizing input mix, output, and profit. (b) Check the second-order conditions to verify that the profit is at a maximumA new French law is forcing industry giants to donate or recycle unsold goods that they would have otherwise destroyed. Apparel companies, from elite fashion houses to mass-market chains, are saddled with an inventory glut following months long closures during the pandemic. Now, they are trying to get rid of the excess without angering waste-conscious consumers—or harming their brands, reports The Wall Street Journal (Aug. 14. 2020). (Links to an external site.) In the U.S., brands and retailers locked out of an entire fashion season are flooding charities with unsold products, in addition to sending goods to discount stores and liquidators. Good360, a nonprofit that collects excess merchandise and distributes it to charities, expects more than $660 million in donations for the entire year, double what it received last year. “Brands don’t want their unsold products winding up at flea markets or on Craigslist,” said the CEO of Good360. LVMH—which owns Louis Vuitton, Dior and other…
- Suppose the utility function of a person consuming two commodities X and Y with income Birr 600 is given by U =2xy. If the per unit price of X is Birr 20 and per unit price of Y is Birr 40. a) Calculate the utility maximizing level of consumption of X1 and X2. b) Find the MRSX, Y at the optimum.If the production function of a firm is given by Q=,and the input prices are r = Birr 8 per unit and w = Birr 2 per unit,Increasing demand from China has made New Zealand the world's biggest exporter of dairy products . Its exports of milk to China increased by 45 % in 2013. More than 300 000 hectares land in New Zealand have been transferred to dairy use from other forms of farming and forestry use since 2000. The increase in milk production has caused the average cost of its production to fall and changes in production methods have affected the price elasticity of supply of milk . Discuss whether the average cost of production always decreases when a firm increases the total output that it produces(Define economies of scale and diseconomies of scale Use of graph to explain ( if applicable ) Explain the various economies of scale e.g. purchasing economies of scale [ up to 5 ] Explain the various diseconomies of scale [ up to Brief conclusion)For the pizza seller whose marginal, average variable, and average total cost curves are shown in the graph below, what is the profit- maximizing level of output and how much profit will this producer earn if the price of pizza is $0.50 per slice? Instructions: In the graph below, label all three curves by clicking on the dropdown to select the appropriate label. Enter your responses as whole numbers. Price ($/slice) 3.50 3.25 3.00 2.75 2.50 2.25 2.00 1.75 1.50 1.25 1.00 0.75 0.50 0.25 0 Cost Curves MC ATC Quantity (slices/day) AVC L 100 200 300 400 500 600 700 800 900 o When the price is $0.50 per slice, the profit-maximizing level of output is o slices per day. At the profit-maximizing level of output, the producer's profit is: $ 225 per day.
- A firm produces at an output level where the marginal product of labor (MPL) is 50 units and the marginal product of capital (MPK) is 100 units. Suppose that the wage rate (PL) is $25 and the rental price of capital (PK) is $40. a.Is this firm maximzing profit?b.What should the firm do if it is not alocating its budget efficiently?The demand and supply functions for a particular commodity are D(x) = 80e-0.001x and S(x)= 30e0.001r , where x is the number of units of the product, D(x) is the price that results in a consumer demand of x units and S(x) is the price that results in a producer supply of x units. a. Find the equilibrium point using your calculator and identify the equilibrium units and price. Give your answers to the nearest whole unit and nearest dollar. The value of x at equilibrium is units. The value of p at equilibrium is b. Determine the consumers' surplus.A firm produces at an output level where the marginal product of labor (MPL) is 50 units and the marginal product of capital (MPK) is 10 units. Suppose that the wage rate (PL) is $25 and the rental price of capital (PK) is $40. a.Is this firm maximzing profit? b.What should the firm do if it is not alocating its budget efficiently?