ECO 469 Study Guide - Quiz Guide: Economic Equilibrium, Marginal Cost, Fixed Cost

• School: University at Buffalo
• Department: Economics
• Course: ECO 469
• Professor: Zhen

Document Summary

Problem set 1 - lectures 2, 3, 4. Note: please use additional paper to write down your answers. Now you can either keep him or replace him by yourself. If you fire him, you need to compensate him with $ 50,000. And your reduced spare time has a valued of $ 30, 000 to you. If you keep him, you need to pay him $ 100,000 this year. You already paid him $ 100,000 last year. Assume all other aspects of your business stay the same. What is the opportunity cost of replacing him: if a cost function is c(q) = 2q3 6q2. What is the marginal cost: when q=5, compare the average cost and the marginal cost. Lecture 3: monopoly and dominant firms (cid:1005)(cid:895) if you(cid:396) (cid:373)o(cid:374)opoly fi(cid:396)(cid:373) is fa(cid:272)i(cid:374)g a de(cid:373)a(cid:374)d (cid:272)u(cid:396)(cid:448)e (cid:395) = (cid:1006)(cid:1004) p, or p(q)=20-q. Le(cid:396)(cid:374)e(cid:396)"s index of market power: suppose the firm is actually a dominant firm.