Home » Two firms in the Waikato region of New Zealand produce the same product in a competitive industry. Each has an old factory using an old technology.

Two firms in the Waikato region of New Zealand produce the same product in a competitive industry. Each has an old factory using an old technology.

0610. Two firms in the Waikato region of New Zealand produce the same product in a competitive industry. Each has an old factory using an old technology. It still pays to operate these factories but it would not pay to expand them. The only variable factor used by either firm is labour. Each firm pollutes the other and thus reduces the output of the other firm. The production functions of firms A and B respectively are Qa = L^0.5a – (2/3)Qb and Qb = L^0.5b – (1/3)Qa, where L^0.5a and L^0.5b are the square roots respectively of the amount of labour used by firms A and B. The wage rate of labour is $1 and the price of the firms’ output is $12.a) If the two firms each maximise profits independently, how much output would each firm produce? How much quasi-rents would each factory earn?b) If someone buys both the firms and maximises joint profits, how much total output would be produced? How much quasi-rent is earned in total?c) Briefly explain the change in your answer to part (b) from part (a).

Show more







Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10