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Suppose that a firm is currently employing 10 workers,




Question 1;Suppose that a firm is currently employing 10 workers, the only variable input, at a wage;rate of $100. The average physical product of labor is 25, the last worker added 10 units;to total output, and total fixed cost is $5,000;a.;What is marginal cost?;b.;What is average variable cost?;c.;How much output is being produced?;d.;What is the average total cost?;e.;Is average variable cost increasing, constant, or decreasing?;Question 2;Suppose that a monopoly faces inverse market demand function as;P = 1002Q;and its marginal cost function is;MC = 40 2Q.;Please answer the following two questions;a. What should be the monopolys profit-maximizing output?;b. What is the monopolys price?;Question 3;Suppose that Nike and Adidas are the only sellers of athletic footwear in the United;States. They are deciding how much to charge for similar shoes. The two choices are;Low and High. The payoff (profit as million) 2X2 matrix is as follows;Low;$1.0;High;Nike;Low;$0.8;Adidas;$ 0.5;$0.6;High;$1.7;$1.2;$ 0.3;$ 0.7;a. Is there a dominant strategy for Nike? Is there a dominant strategy for Adidas?;b. If Nike is the price leader and the first mover, what will be the Nash equilibrium in the game?


Paper#28944 | Written in 18-Jul-2015

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