Homework Answers
Answer
Long-run price is the minimum average total cost and the quantity is the production at the minimum ATC.
It is found by the first differentiation of the ATC and set equal to 0
long-run quantity for each firm is 2 units
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Suppose a firm in a perfectly competitive market has the cost function c(y)=y2 + 2y +4...
Suppose a firm in a perfectly competitive market has the cost function c(y)= y2 + 2y...
Suppose a firm in a perfectly competitive market has the cost function c(y)= y2 + 2y +4 Now suppose that there is a sudden increase in demand that raises the market price to p= 8. How much does the firm produce at this price?
D1. Suppose a firm in a perfectly competitive market has the cost function c(y)= y2 +...
D1. Suppose a firm in a perfectly competitive market has the cost function c(y)= y2 + 2y +9 What is the firm's average total cost? y + 2 y + 2 + 2y + 2
Question 3 1 pts Suppose a firm in a perfectly competitive market has the cost function...
Question 3 1 pts Suppose a firm in a perfectly competitive market has the cost function c(y)= y2 + 2y + 9 What is the firm's fixed cost? y+2+ 2y + 2 Oy+2 Question 4 1 pts Suppose a firm in a perfectly competitive market has the cost function c(y)= y2 + 2y + 9 What is the firm's marginal cost? 2y + 2 Oy+2+2 Oy+ 09 2y
Suppose a firm with cost structure c(y)= y2 + 2y +4 is the only producer of...
Suppose a firm with cost structure c(y)= y2 + 2y +4 is the only producer of the good in the market. Market demand is given as y(p)= 40 - 2p What is the profit-maximizing quantity for this firm? Suppose a firm with cost structure c(y)= y + 2y + 4 is the only producer of the good in the market. Market demand is given as y(p)= 40 - 2p What price will the firm charge? Suppose a firm with cost...
i) The long run cost function for each firm in a perfectly competitive market is c(q)...
i) The long run cost function for each firm in a perfectly competitive market is c(q) = 2^1.5+16q^0.5, LMC = 1.59^0.5+ 8q^-0.5, market demand curve is Q=1600-2p. Find price (p) of output and the level of output (q) produced by the firm in a long run equilibrium. Find the long run average cost curve for the firm. ii) what happens in the long run if the market demand curve shifts to Q=160-20p?/ -A competitive industry is in long run equilibrium....
Consider a perfectly competitive industry in which each firm i has a total cost function given...
Consider a perfectly competitive industry in which each firm i has a total cost function given by the equation: TC= 128 + 4q+2q^2. Further assume that the industry demand function is given by the following: P = 84 – 2Q. a) Describe the long run market equilibrium. That is, identify the equilibrium price and quantity, output for each firm, the number of firms in the industry and the level of producer and consumer surplus. What is the value of own...
Suppose in a competitive market, the long-run cost function of a firm is ?(?) = 0.66874?5⁄4...
Suppose in a competitive market, the long-run cost function of a firm is ?(?) = 0.66874?5⁄4 + 1,280 where x is the output. (a) What is the minimum long-run average cost? At what output level is this attained? (b) Suppose all firms are identical, what is the long-run profit of each firm in the competitive market? What is the long-run equilibrium price? (c) Suppose there are 64,000 consumers each with demand function xd(p) = 625/p2 How many firms exist in...
Suppose the market for canola oil is perfectly competitive. There are 1,000 firms in the market,...
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...
A representative firm in a perfectly competitive, constant cost industry has a cost function T C...
A representative firm in a perfectly competitive, constant cost industry has a cost function T C = 100+4Q 2+ 100Q. (a) What are this firm fixed cost, variable cost and marginal cost? (b) What is the long-run equilibrium price for this industry? (c) If the market demand is Q = 1000 − P , how many firms will operate in this long-run equilibrium? (d) What is the most that this firm would be willing to pay for the exclusive right...
In a perfectly competitive market, a firm has the following short-run total cost function: C(q)=16+4q+q2 The...
In a perfectly competitive market, a firm has the following short-run total cost function: C(q)=16+4q+q2 The market demand is Q(p)=220-p a. Show that marginal cost curve passes through the minimum point of average cost curve. Draw a figure to show it. b. Find the firm’s individual short-run supply function. Draw it on the above figure. For the following questions, suppose that there are currently 10 identical firms in this market. c. What is the market supply curve? What are the...
Suppose a firm in a perfectly competitive market has the cost function c(y)= y2 + 2y +4 Now suppose that there is a sudden increase in demand that raises the market price to p= 8. How much does the firm produce at this price?
D1. Suppose a firm in a perfectly competitive market has the cost function c(y)= y2 + 2y +9 What is the firm's average total cost? y + 2 y + 2 + 2y + 2
Question 3 1 pts Suppose a firm in a perfectly competitive market has the cost function c(y)= y2 + 2y + 9 What is the firm's fixed cost? y+2+ 2y + 2 Oy+2 Question 4 1 pts Suppose a firm in a perfectly competitive market has the cost function c(y)= y2 + 2y + 9 What is the firm's marginal cost? 2y + 2 Oy+2+2 Oy+ 09 2y
Suppose a firm with cost structure c(y)= y2 + 2y +4 is the only producer of the good in the market. Market demand is given as y(p)= 40 - 2p What is the profit-maximizing quantity for this firm? Suppose a firm with cost structure c(y)= y + 2y + 4 is the only producer of the good in the market. Market demand is given as y(p)= 40 - 2p What price will the firm charge? Suppose a firm with cost...
i) The long run cost function for each firm in a perfectly competitive market is c(q) = 2^1.5+16q^0.5, LMC = 1.59^0.5+ 8q^-0.5, market demand curve is Q=1600-2p. Find price (p) of output and the level of output (q) produced by the firm in a long run equilibrium. Find the long run average cost curve for the firm. ii) what happens in the long run if the market demand curve shifts to Q=160-20p?/ -A competitive industry is in long run equilibrium....
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