Suppose that the short-term production function of firm A is given by q-f(L)-3L. The price of...

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Suppose that the short-term production function of firm A is given by q-f(L)-√3L. The price of Lis 6 and the fixed cost is 10. The price of product is 20. (1) What is the short-term cost function? (2) What is the profit maximizing quantity of firm A? (3) How much is the profit in (2). 3. Two firms, firm 1 and 2, compete by choosing quantity. The inverse market demand function is P-250-Q. Each firm's marginal cost is 10. Suppose that firm 1 sets its quantity first and then firm 2 sets its quantity after observing firm 1's decision. What quantity will each firm produce? 4. Suppose that the marginal benefit of a public good for consumer 1 is given by MB₁ -10-2q. and MB₂ = 20-4qfor consumer 2. The marginal cost to produce the public good is 6. What level is the efficient level of production for the public good? 5. Find all the Nash equilibrium or equilibria in the following payoff matrix. q-f(L)-√√3L Player 1 Top Bottom Left 7,3 2,-1 Player 2 Right 1,2 5,1 Suppose that the short-term production function of firm A is given by q-f(L)-√3L. The price of Lis 6 and the fixed cost is 10. The price of product is 20. (1) What is the short-term cost function? (2) What is the profit maximizing quantity of firm A? (3) How much is the profit in (2). 3. Two firms, firm 1 and 2, compete by choosing quantity. The inverse market demand function is P-250-Q. Each firm's marginal cost is 10. Suppose that firm 1 sets its quantity first and then firm 2 sets its quantity after observing firm 1's decision. What quantity will each firm produce? 4. Suppose that the marginal benefit of a public good for consumer 1 is given by MB₁ -10-2q. and MB₂ = 20-4qfor consumer 2. The marginal cost to produce the public good is 6. What level is the efficient level of production for the public good? 5. Find all the Nash equilibrium or equilibria in the following payoff matrix. q-f(L)-√√3L Player 1 Top Bottom Left 7,3 2,-1 Player 2 Right 1,2 5,1

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1 The shortterm cost function can be derived by taking the derivative of the production function with respect to labor L and multiplying it by the price of labor w plus the fixed cost FC Given Product... View the full answer