# Questions tagged [producer-theory]

Study of the behavior of firms in organizing their production and allocating productive resources.

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### why are there heterogenous prices fixed for every unit of output

everyone says that it is because a monopoly decides the market's output, prices fixed per unit of the same keep decreasing. question: if the firm has the ability to influence market prices, why would ...
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### Global returns to scale

I have a production function of the form $f(x_1,x_2) = x_1^a x_2^b$ and I am trying to figure out what the global returns to scale would be given that $a,b \in (0,1)$. This production function is ...
1 vote
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### How to derive the input demand functions from a perfect substitutes production function

I am struggling to derive the input demand functions from a production function with inputs that are perfect substitutes. The production function is as follows: $f(x_1,x_2) = (x_1+x_2)^\frac{1}{2}$ I ...
1 vote
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### Quasi fixed costs - two technologies

If a firm has the choice of using two production technologies to produce the same output: A, featuring a quasi-fixed cost of 50 (i.e. 50 for all q > 0, 0 when q = 0), then a variable cost of 5q B, ...
1 vote
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### Do property values capture producer choice in agriculture?

I am interested in conducting research into how climate change impacts the social welfare of a country, particularly how it affects producers of agricultural product. My immediate thought was that as ...
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### Perfectly elastic supply

How would you algebraically write a perfectly elastic supply? Will it be infinite at price = 4? (The choice of the number 4 is completely arbitrary)
1 vote
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### Value Function For Durable-Good Monopolist with General Distribution

It is known that with a unit mass of consumers, each of whom has a value distributed between 0 and 1, one can think of the monopolist solving \begin{equation} \max_{p} \ p[1-F(p)] \end{equation} when ...
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### How can i determine the homogeneity degree of Stone Gaery function? [closed]

I dont know how to demonstrate homogeneity degree of this function $(X-\alpha)^{\beta}(Y)^{1-\beta}$ Any idea? Thanks.
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### Intermediate Case of Bertrand and Cournot

I am wondering whether there is a model of oligopolies in which we have some intermediate case of Bertrand and Cournot competition. What I do not mean by "intermediate" is the mixed Bertrand - Cournot ...
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### Finding long run equilibrium price, quantity and number of firms with a linear average cost function

I've been been brushing up on my micoreocnomics lately and I came across a question in Perloff that looked really simple, but for some reason I am struggling to answer: Assume we are in the long run ...
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### Changing Constant Factor Demands

I’ve been given this true false question: Consider the minimization of wL + rK given F(K, L) $\geq$ Q with F(K, L) strictly increasing in K and L. The conditional factor demands K*(Q, w, r) and L*(Q, ...
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### How is Aggregate Supply(Willing) equal to National Income(Actual)?

Acc. to definition of Aggregate Supply It is the total value of final goods and services that the producers are willing to supply in country . Definition of National Income It is the value of ...
1 vote
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### Is the definition of Investment variable in Economics?

I studied that Investment is the expenditure incurred on the procurement of such goods that would help us in production of goods and services. And mainly consists of Fixed and Inventory Investment ...
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### Why does a homothetic function have constant ratio of marginal products along rays?

A homothetic ordering is defined as $x \succeq y \Rightarrow \lambda x \succeq \lambda y \qquad \forall \lambda >0$ where $x,y \in \mathbb{R}^n$ Then, any differentiable function representing ...
1 vote
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### MICROECONOMICS: Optimal quantity produced in a Perfect Competition Market

Suppose the Total Cost function of a firm in Perfect Competition is given by: $$C(q) = 450 + 15q + 2q^2$$ The market price is $P = 15$ per unit Determine the optimal quantity produced by ...
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### How to improve the underperforming construction productivity by correcting its market failures?

Globally, labor-productivity growth in construction has averaged only 1 percent a year over the past two decades, compared with growth of 2.8 percent for the total world economy and 3.6 percent in the ...
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### Consider the following production function $Q=min \left(\frac{L}{2a}, \frac{K}{4b}\right)$. Let $w$ and $r$ be the wage and rental rate respectively [closed]

The cost function associated with this production function is $A) 2awQ\\ B) 4brQ\\ C) (wa + 2br)Q\\ D) None\; of\; the\; above$ What I have tried is: We have the cost function $wL+rK=C$. Since, here, ...
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### How to find the "cost function" given the production function *as well as* the cost per unit produced and the fixed costs?

I'm working on the following homework problem, transcribed verbatim: A firm has a production function defined as $y = 8L^{1/4}K^{3/4}$. The firm faces costs of \$20 wage, \$60 rental rate of ...