Homework Answers
Ans. The profit-maximizing firm higher worker up to the point where
Marginal Revenue Product of labor (MRPL = Wage Rate ( W)
Here, this firm should higher 10 workers in order to maximize profits.
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Imagine a firm operating in competitive labor and product markets. The market price of Q is...
Q9. A perfectly competitive firm operates in the short-run with labor as its only variable factor....
Q9. A perfectly competitive firm operates in the short-run with labor as its only variable factor. Its production function is: Q = -L3 + 10L2 + 88L where Q is output per week measured in tons and L is the number of workers employed. The weekly wage is $324 and the product sells for $3.24 per ton. (a) At what weekly output is marginal cost equal to average variable cost? (b) What is the minimum product price...
3.) A firm sells its product in a perfectly competitive market where other firms charge a...
3.) A firm sells its product in a perfectly competitive market where other firms charge a price of $40 per unit. The firm's total costs are C(Q) 20+40+202. A. B. C. D. How much output should the firm produce in the short-run? What price should the firm charge in the short-run? what are the firm's short-run profits? What adjustments should be anticipated in the long-run?
A firm sells its product in a perfectly competitive market where other firms charge a price...
A firm sells its product in a perfectly competitive market where other firms charge a price of $90 per unit. The firm's total costs are CIQ) = 60 + 14Q+ 20 a. How much output should the firm produce in the short run? C units b. What price should the firm charge in the short run? $O c. What are the firm's short-run profits? $D d. What adjustments should be anticipated in the long run? Entry will occur until economic...
A firm operating in a purely competitive environment is faced with a market price of $250....
A firm operating in a purely competitive environment is faced with a market price of $250. The firm’s total cost function (short run) is as follows: TC = 6000 + 400Q – 20Q2 + Q3 Should the firm produce at this price in the short run? If the market price is $300, what will total profits (losses) be if the firm produce 10 units of output? Should the firm produce at this price? If the market price is greater than...
1. Consider the production function y = f(L,K) for a firm in a competitive market setting. The price of the outpu...
1. Consider the production function y = f(L,K) for a firm in a competitive market setting. The price of the output good is p > 0. The prices of the inputs Labour and Capital are w> 0 and r>0 respectively. The firm chooses L and K in order to maximize profits, (L.K). (a) How does the short-run production function differ from the long-run production function? (b) Write out the profit function for the firm, (L,K). (c) Derive the first order...
2. A firm sells its product in a perfectly competitive market where other firms charge a...
2. A firm sells its product in a perfectly competitive market where other firms charge a price of $80 per unit. The firm's total costs are C(O) 40 80202 a. How much output should the firm produce in the short run? b. What price should the firm charge in the short run? c. What are the firm's short-run profits? d. What adjustments should be anticipated in the long run?
Firm Z, operating in a perfectly competitive market, can sell as much or as little as...
Firm Z, operating in a perfectly competitive market, can sell as much or as little as it wants of a good at a price of $16 per unit. Its cost function is Ce50+ o a) Determine the firm's profit-maximizing level of output. Compute its proft. b) The industry demand curve is Q-200-5P. What is the total market demand at the current $16 price? If all firms in the industry have cost structures identical to that of firm Z, how many...
) A firm produces output that can be sold at a price of $10. The Cobb-Douglas...
) A firm produces output that can be sold at a price of $10. The Cobb-Douglas production function is given by Q = F(K,L) = K½ L½ If capital is fixed at 1 unit in the short run, how much labor should the firm employ to maximize profits if the wage rate is $2?
1. Imagine a firm has the following short-run production function: q=f(L,K) = K L – L?...
1. Imagine a firm has the following short-run production function: q=f(L,K) = K L – L? Assume K = 25. a. Fill in the following table. (First, find the total output from the production function, then find the marginal product by dividing the change in total output by change in labor.) Capital MPL Labor 7 Total Output 126 APL 18 25 12 25 25 25 25 25 10 11 12 13 14 15 25 25 25 b. How many units...
TU) UdlIT IS. In a perfectly competitive market: each firm produces a unique product and chooses a price that maximize...
TU) UdlIT IS. In a perfectly competitive market: each firm produces a unique product and chooses a price that maximize there are very few firms, and each controls a large segment of the market. entry into the industry is restricted in the long run. there are many relatively small firms, and each firm is a price-taker. c. t If a firm is a price-taker, it: sells its product at the price determined by the market. sells its product at the...
3.) A firm sells its product in a perfectly competitive market where other firms charge a price of $40 per unit. The firm's total costs are C(Q) 20+40+202. A. B. C. D. How much output should the firm produce in the short-run? What price should the firm charge in the short-run? what are the firm's short-run profits? What adjustments should be anticipated in the long-run?
A firm sells its product in a perfectly competitive market where other firms charge a price of $90 per unit. The firm's total costs are CIQ) = 60 + 14Q+ 20 a. How much output should the firm produce in the short run? C units b. What price should the firm charge in the short run? $O c. What are the firm's short-run profits? $D d. What adjustments should be anticipated in the long run? Entry will occur until economic...
1. Consider the production function y = f(L,K) for a firm in a competitive market setting. The price of the output good is p > 0. The prices of the inputs Labour and Capital are w> 0 and r>0 respectively. The firm chooses L and K in order to maximize profits, (L.K). (a) How does the short-run production function differ from the long-run production function? (b) Write out the profit function for the firm, (L,K). (c) Derive the first order...
2. A firm sells its product in a perfectly competitive market where other firms charge a price of $80 per unit. The firm's total costs are C(O) 40 80202 a. How much output should the firm produce in the short run? b. What price should the firm charge in the short run? c. What are the firm's short-run profits? d. What adjustments should be anticipated in the long run?
Firm Z, operating in a perfectly competitive market, can sell as much or as little as it wants of a good at a price of $16 per unit. Its cost function is Ce50+ o a) Determine the firm's profit-maximizing level of output. Compute its proft. b) The industry demand curve is Q-200-5P. What is the total market demand at the current $16 price? If all firms in the industry have cost structures identical to that of firm Z, how many...
1. Imagine a firm has the following short-run production function: q=f(L,K) = K L – L? Assume K = 25. a. Fill in the following table. (First, find the total output from the production function, then find the marginal product by dividing the change in total output by change in labor.) Capital MPL Labor 7 Total Output 126 APL 18 25 12 25 25 25 25 25 10 11 12 13 14 15 25 25 25 b. How many units...
TU) UdlIT IS. In a perfectly competitive market: each firm produces a unique product and chooses a price that maximize there are very few firms, and each controls a large segment of the market. entry into the industry is restricted in the long run. there are many relatively small firms, and each firm is a price-taker. c. t If a firm is a price-taker, it: sells its product at the price determined by the market. sells its product at the...
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