6. Suppose you have a job analyzing a perfectly competitive market. The aggregate demand is CP(p)...
6. Suppose you have a job analyzing a perfectly competitive market. The aggregate demand is 0(p)98 p and the cost function for the firms is Ca)735. Suppose all firms use the same cost function. (a) Setup and solve the profit maximization problem over quantity. Write the quantity an individual firm will produce as a function of the sale price. 3 points) (b) Solve for the price, quantity, and profits for cach individual shop and then also for aggregate quantity in...
question (e) and question (f) 6. Suppose you have a job analyzing a perfectly competitive market. The aggregate demand is (p) = 98 - and the cost function for the firms is C(q) = 772 +35. Suppose all firms use the same cost function. (a) Setup and solve the profit maximization problem over quantity. Write the quantity an individual firm will produce as a function of the sale price. (3 points) (b) Solve for the price, quantity, and profits for...
6. Suppose you have a job analyzing a perfectly competitive market. The aggregate demand is o p) = 98 - P and the cost function for the firms is C(q) = 79 +35. Suppose all firms use the same cost function. (a) Setup and solve the profit maximization problem over quantity. Write the quantity an individual firm will produce as a function of the sale price. (3 points) (b) Solve for the price, quantity, and profits for each individual shop...
Suppose the market for canola oil is perfectly competitive. There are 1,000 firms in the market, each of which have a fixed cost of FC=2 and a marginal cost of MC= 1+Q, where q is quantity produced by an individual firm. Let QS denote the total quantity supplied in the market. The market demand is QD= 15,250-250P A) Find the market supply equation, that is write QS as a function of price P B)What is the equilibrium price? What is...
1. Suppose the market for canola oil is perfectly competitive. There are 1.000 firms in the market, each of which have a fixed cost of FC = 2 and a marginal cost of MC = 1 + q, where q is the quantity produced by an individual firm. Let Q. denote the total quantity supplied in the market. The market demand for canola oil is given by Qd = 15, 250 - 250P. a) Find the market supply equation, that...
1. The market for tortillas is perfectly competitive, with market demand given by p 1.000022, with price in dollars per tortilla and Q in thousands of tortillas. The short-run marginal cost curve for a typical tortilla factory is MC 10+.0005q,with MC in dollars per tortilla and q in thousands of tortillas. The fixed cost of running a factory is $15,000 per firm. (a) If there are 50 identical factories, determine the short-run aggregate supply function. (b) What is the market...
1. The market for tortillas is perfectly competitive, with market demand given by p 1-.000020, with price in dollars per tortilla and Q in thousands of tortillas. The short-run marginal cost curve for a typical tortilla factory is MC = .10 + .0005g.with MC in dollars per tortilla and q in thousands of tortillas. The fixed cost of running a factory is $15,000 per firm. (a) If there are 50 identical factories, determine the short-run aggregate supply function. b) What...
Consider a perfectly competitive market comprised of identical firms each facing the following cost function: C(q) = 4 +q? where q is the firm-specific level of production of the representative firm. The market demand function is Q(p) = 400 - 4p where Q(p) is the aggregate demand in the market (expressed as function of price) and p is the price a) Derive the firm-specific supply function of the representative firm as a function of price b) Assume there are N...
Suppose that the market is perfectly competitive with a price of $16. The graph below shows the cost curves of a typical manufacturer in the market. a. Why is the firm's marginal revenue curve horizontal? MC Price (dollars per unit) AVC b. What is the profit maximizing level of output for the firm? 0 14 17 19 Quantity (units) c. Given your answer to part (a), is the firm making a profit or a loss? What is the value of...
Please show all work. PART II. Problems 1. Suppose the market for canola oil is perfectly competitive. There are 1.000 firms in the market, each of which have a fixed cost of FC = 2 and a marginal cost of MC = 1 + q, where q is the quantity produced by an individual firm. Let s denote the total quantity supplied in the market. The market demand for canola oil is given by Qd = 15, 250 - 250P....