For this problem, do not worry if prices and quantities are not "realistic." Suppose that the...
Suppose that a particular firm is in a perfectly competitive constant-cost industry. When it is using the optimal amount of capital for the long-run, total cost is C(q)=1000+(q2/10), ATC(q)=(1000/q)+q/10, and marginal cost is MC(q)=2q/10. This implies that ATC=MC at a quantity of 100 and a per unit cost of $20. 1. At what quantity is average total cost minimized? 2. What is the long-run competitive equilibrium price? 3. If market demand is QD=12,000-200P and short-run market supply is QS=300P, what...
Section iV: Problems 19. Suppose there is a competitive industry in which, at this market supply is given by P-100 + Q A) What is the market price and quantity for the product in this market? In this industry, each firm faces a cost structure as follows: TC 100q+ q'. Based on this TC structure, Marginal cost 2q+ B) What is the firm's profit maximizing quantity of output? C) What is the firm's total revenue, total cost and profit? D)...
A perfectly competitive market is described by the demand curve QD= 60 – 2P, and the supply curve QS = 5P – 10. A typical firm has the total cost equation: C = 16 + 2QF + QF2. What is the equilibrium price and quantity in the market? Compute the firm’s total revenue, total cost, and total profit. MC = dC/dQF = 2QF + 2
Suppose there is a perfectly competitive industry where all the firms are identical with identical cost curves. Furthermore, suppose that a representative firm’s total cost is given by the equation TC = 100 + q2 + q where q is the quantity of output produced by the firm. You also know that the market demand for this product is given by the equation P = 900 - 2Q where Q is the market quantity. In addition, you are told that...
18. In a perfectly competitive market, individual firms set: A) prices and quantities B) neither prices nor quantities. C) quantiies but not prices D) prices but not quantities 19. The perfectly competitive firm faces a perfectly elastic demand curve because A) t has the ability to set the price and force everyone to buy at that price. it has no ability to control price. B) C) t doesn't; it faces a perfectly inelastic demand curve D) it doesn't; everyone knows...
1) A perfectly competitive firm faces the following Total revenue, Total cost and Marginal cost functions: TR = 10Q TC = 2 + 2Q + Q2 MC = 2 + 2Q At the level of output maximizing profit , the above firm's level of economic profit is A) $0 B) $4 C) $6 D) $8 *Additional information after I did the math: The price this firm charges for its product is $10, the level of output maximizing profit is 4...
Econ 308 Fall 2019 Assignment 5 Deadline: Tuesday, Dec. 10th, 2019 1. Suppose a firm's total cost function is given by TC = 6,000 + 20 +0.250, where MC- 2 +0.50 a. What is the output level that minimizes total cost? b. What is the output level that minimizes average total cost? 2. A perfectly competitive industry in long-run equilibrium comprises 200 identical firms. In one of the firms, the workers unionize and receive a 20% wage increase. What happens...
a) What is the market price? p = 8 b) Derive the average variable cost, average total cost, and marginal cost function. avc = 1 + q atc = 4/q + 1 + q mc = 1 + 2q c) In the short run, how much does each firm produce? qs = 6 d) In the short run, how much economic profit or loss will be obtained? ep = 2 e) Based on the results in...
Assume that a perfectly competitive firm faces the market equilibrium price P*=$6. When the firm maximizes its positive profit in the short-run, its average total cost (ATC) and marginal cost (MC) are most likely as ATC=6 and MC=4 ATC=6 and MC=6 ATC=4 and MC=4 ATC=4 and MC=6
1. Suppose Andy sells oranges in a perfectly competitive market. The following table represents his output and costs: Output Total Fixed Variable ATC AFC AVC MC per day Cost Cost Cost $10.00 $20.50 $24.50 $28.00 $34.00 $43.00 $55.50 $72.00 $93.00 $119.00 a) Fill in the missing columns b) Suppose the equilibrium price for oranges in the market is $12.50. How many oranges should Andy sell if he wants to maximize profits? What price will he charge for a unit of...