Find the factor demand relationship x*, and the optimal production level q. If p

Question

Find the factor demand relationship x*, and the optimal production level q. If p-9, wx-1, and Wy-1, what would the firm's profit be? 2. Mike is a utility-maximizer; his utility function is u(ci,C2)-C11/3C2 l/4 Inflation is 3% and Mike plans to consume equal amounts in periods 1 and 2. What is the interest rate? 3. The discriminating monopolist' market structure, always results in a lower consumer surplus than either the standard monopolist or the perfectly competitive market for a given set of parameters, and standard demand and supply functions. True or False.

Explanation / Answer

Ans 2 The interest rate for the above question is 3 percent as because if the inflation is 3 percent the interest rate is also a 3 percent.

Ans 3 True, as the discriminating monopolist market strcture always results in a lower consumer surplus either in the condition of monopolist or in the condition of perfect competition in the market.

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