Question

Suppose that the production of a good exhibits external economies of scale. In particular, suppose that...

Suppose that the production of a good exhibits external economies of scale. In particular, suppose that the total cost of producing a quantity Q of the good is given by C(Q) = [100/(Q + 2)]Q +2Q.

a. Suppose that for the whole world, the demand for this good is given by QD = 50 - (1/2)P and all the production of the good is concentrated in the country in question. What is the world equilibrium output?

b. What is the world equilibrium price?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose that the production of a good exhibits external economies of scale. In particular, suppose that...
Suppose that the production of a good exhibits external economies of scale. In particular, suppose that the total cost of producing a quantity Q of the good is given by C(Q) = [100/(Q + 2)]Q +2Q. a.Suppose that another country joins the world market for this good. There, the total cost is given by C*(Q*) = [50/(Q*+2)]Q* + 2Q*. What is the average cost when the quantity produced is 8? b. Suppose that in this country, the demand for this...
This question deals with external economies of scale. a) (5 marks) How does external economies of...
This question deals with external economies of scale. a) How does external economies of scale potentially justify infant industry protection? Use a diagram to help you answer this. b) Suppose that Germany and India can both produce shirts, but India has a lower average cost curve. Germany has the head start in world production of shirts, beginning as the world’s only supplier of shirts. Even though Germany has the head start advantage, India can still enter production of shirts. Draw...
1. When a technology exhibits internal economies of scale, average cost falls for the industry when...
1. When a technology exhibits internal economies of scale, average cost falls for the industry when firm's output increases. average cost falls for each firm when industry output increases firm's average cost falls when the firm's output increases. firm's marginal cost falls when the firm's output increases. 2. When a technology exhibits external economies of scale average cost falls for the industry when firms's output increases. average cost falls for each firm when industry output increases. firm's average cost falls...
Suppose there exists external economies of scale in an industry located in country X. If country...
Suppose there exists external economies of scale in an industry located in country X. If country X moves from free trade to autarky, it necessarily loses welfare. Explain in detail, using any relevant diagrams, whether the above statement is true, false or uncertain.
Given the following information, does this firm has economies of scale or diseconomies of scale. Explain...
Given the following information, does this firm has economies of scale or diseconomies of scale. Explain why with reference to the values of ATC. Small production unit . Large production uni Q . FC VC       Q . FC . VC . 5 50 . 50 50 . 500 . 500 10 . 50 . 70 100 500 . 800 20 . 50 . 200 200 . 500 . 2500
Given the following information, does this firm has economies of scale or diseconomies of scale. Explain...
Given the following information, does this firm has economies of scale or diseconomies of scale. Explain why with reference to the values of ATC. Small production unit . Large production uni Q . FC VC       Q . FC . VC . 5 50 . 50 50 . 500 . 500 10 . 50 . 70 100 500 . 800 20 . 50 . 200 200 . 500 . 2500
Question 2 Consider an economy that is closed and produces a good (Q 1 ). The...
Question 2 Consider an economy that is closed and produces a good (Q 1 ). The domestic supply and demand for the good is given below: Supply: Q 1 = -50 + 5P Demand: Q 1 = 400 – 10P a. Find the equilibrium price and quantity in the market and illustrate graphically. b. Suppose the world price in the market is $15 per unit and the country opens up to trade. Calculate the quantity of imports or exports in...
A company produces two goods, X and Y. Production technology exhibits the following costs, where C...
A company produces two goods, X and Y. Production technology exhibits the following costs, where C (Qx, Qy) represents the cost of producing Qx units of good X and Qy units of good Y: C (0.50) = 100, C (5,0) = 150, C (0,100) = 210, C (10,0) = 320, C (5,50) = 240, and C (10,100) = 500. Respond and justify your answers to the next questions: Does this technology exhibit economies of scale? Does this technology exhibit economies...
1. Suppose a monopolist faces the demand for its good or service equal to Q =...
1. Suppose a monopolist faces the demand for its good or service equal to Q = 130 - P. The firm's total cost TC = Q2 + 10Q + 100 and its marginal cost MC = 2Q + 10. The firm's profit maximizing output is 2. Suppose a monopolist faces the demand for its good or service equal to Q = 130 - P. The firm's total cost TC = Q2 + 10Q + 100 and its marginal cost MC...
1. What does the emergence of large developing economies mean for the existing developed world? A         ...
1. What does the emergence of large developing economies mean for the existing developed world? A          More income for people living in developed economies. B          An inefficient market, caused by political instability. C          Disruption of historical competitive advantages. D          Ongoing prosperity with no challenges for developed economies. E          None of the above. 2. If a good is normal, then the demand curve for that good must be A          downward sloping. B          upward sloping. C          perfectly elastic. D          completely inelastic. E...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT