# Questions tagged [microeconomics]

Microeconomics is a branch of economics that studies the market behavior of individual actors (usually firms and consumers) and the aggregation of their actions in different institutional frameworks (usually the market).

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### How to Calculate Price Elasticity of Demand When Perfectly Elastic?

When we have perfect elasticity, the demand curve is a horizontal line and the elasticity of demand coefficient is equal to infinity. How do we arrive at a solution equal to infinity? We know that ...
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### Why does $\frac{MP_L}{MP_K} = \frac{w}{r}$?

I did a practice problem set. I was given a production function $F(K,L)$ and had to derive the firm's cost function. To do this, I used the following relationship: \begin{equation} \frac{MP_L}{MP_K}=...
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### Could anyone here be able to explain gambling addiction and its debt with Microeconomics theory?

I am a research master student in Cognitive and Clinical Neuroscience, with the specialization/track Neuroeconomics and have to come up with a master thesis subject soon. I was thinking about gambling ...
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### Intertemporal consumption question

This question is driving me nuts. Suppose, an individual lives for two periods. In each period she consumes only one good,which is rice. In period 2, she can costlessly produce 1 unit of rice, but ...
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### How to estimate loss of customers due to customer support inefficiency?

I have a data about customers and their activity on a website for a two-year period. Also, I have a customer support work evaluation data for a shorter period of that two-year period. The question is: ...
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### Short Run Total Cost function Question

I am confused about the Short Run Total Cost function of this problem. If the firm's production function is $F(K,L) = K+\ln(L)$ derive the short run total cost function. I was able to solve the ...
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### Mathematical framework for modelling the relationship between price and sales of a product

In my job as a data scientist, I am required to model the relationship between the price of a product and the sales or number of unit sold. I am trying to build a simplistic model, the assumptions of ...
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### Why is marginal cost not the cost of producing the last unit?

I am slightly confused about this wikipedia article. en.wikipedia.org/wiki/Marginal_cost It states that marginal cost is not the cost of producing the next or last unit. Why is this the case? I ...
### Can $u(x) = \sqrt{x_1 x_2} + \sqrt{x_3 x_4}$ be solved by Kuhn–Tucker conditions?
Consider $\max_{x_1, x_2, x_3, x_4} u(x) = \sqrt{x_1 x_2} + \sqrt{x_3 x_4}$ s.t. $\; p_1x_1 + p_2x_2 + p_3x_3 + p_4x_4 \le w$ I know we can solve the max problem through separately considering ...