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QUESTION 12 61-0.2L, where Q is output and L is labor force. Find the size of...
Labor TVC TC MC AFC AVC ATC 25 50 75 100 25 125 (a) Complete...
Labor TVC TC MC AFC AVC ATC 25 50 75 100 25 125 (a) Complete the blank columns (5 points). Please create a table like mine and fill it. (b) Assume the price of this product equals $10. What's the profit-maximizing output (q)? (3 points). Note: managers maximize profits by setting MR=MC and under perfectly competitive markets, MR=Price. Thus, maximize profit by producing a where P=MC.(2 points) (c) What is the profit? (3 points) TOTAL COST (TC) - the...
Suppose a firm has the production function: Q=2KL, where K is capital, L is labor and...
Suppose a firm has the production function: Q=2KL, where K is capital, L is labor and Q is quantity. If capital is fixed at 4 in the short run. Suppose the cost of a unit of capital is $2 (r=2), and the cost of a unit of labor is $4 (w=4). What is the short run total cost function in terms of Q? A. TC=4+Q B. TC=4+0.5Q C. TC=8+Q D. TC=8+0.5Q
2. Consider the total cost function TC = TC(Q), where Q is output. Show that average...
2. Consider the total cost function TC = TC(Q), where Q is output. Show that average total cost, ATG, reaches its minimum point where MC ATC.
Section iV: Problems 19. Suppose there is a competitive industry in which, at this market supply...
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)...
Suppose a firm's cost function is C (q) = 2q2 + 8. The output q that...
Suppose a firm's cost function is C (q) = 2q2 + 8. The output q that minimizes average total cost is: (Hint: At the minimum of the ATC, ATC is equal to MC) a)4 b) 2 c) 0 d) 8
A firm faces the following average revenue (demand) curve: P = 120 – 0.02Q where Q...
A firm faces the following average revenue (demand) curve: P = 120 – 0.02Q where Q is weekly production and P is price, measured in cents per unit. The firm's cost function is given by TC = 60Q + 25,000. Assume that the firm maximizes profits. Calculate the level of production, price, and total profit per week.
produce 16000 units of output. What is the cost minimizing combination of capital and labor for...
produce 16000 units of output. What is the cost minimizing combination of capital and labor for this firm? What is it's minimized cost of producing 16000 units of output? 2.2 Problem 2 In a perfectly competitive market all firms (including potential entrants) have a total cost function given by TC(Q) = 100Q - QP + ', where Q is that firm's output. Therefore, each firm's average cost function is AC(Q) = 100-Q+ Qand each firm's marginal cost function is given...
Consider a competitive rm with total costs given by TC(q) = 100 + 10q + q^2,...
Consider a competitive rm with total costs given by TC(q) = 100 + 10q + q^2, The firm faces a market price p = 50. (a) Write expressions for total revenue TR and marginal revenue MR as functions of output q. (b) Write expressions for average total cost ATC, average variable cost AVC, and marginal cost MC as functions of output q. (c) For what value of output is ATC minimized? (d) Find the profit maximizing level of output q...
Bob's Barbershop has a daily short-run cost given by C(q) = 5 + 10 +0.52% where...
Bob's Barbershop has a daily short-run cost given by C(q) = 5 + 10 +0.52% where q is the number of haircuts. The associated marginal cost is given by MC = 10 + q. Suppose the market for haircuts is perfectly competitive and the current market equilibrium price of a haircut is $25. a. How many haircuts should Bob's Barbershop give each day if it wants to maximize profit? b. If it maximizes profit, how much profit will Bob's Barbershop...
7. Assume that the long-run production function can be expressed as Q-SKL? Where Q is quantity...
7. Assume that the long-run production function can be expressed as Q-SKL? Where Q is quantity of output, K is the quantity of capital and L is the quantity of labor. If capital is fixed at 10 units in the short run then the short-run production function is: Q=10KL b. Q=50KL? Q=10L? d. 0=50L Q=500KL 8. For a linear total cost function: a. MC will be downward sloping b. MC = AVC c. AVC is upward sloping and linear d....
Labor TVC TC MC AFC AVC ATC 25 50 75 100 25 125 (a) Complete the blank columns (5 points). Please create a table like mine and fill it. (b) Assume the price of this product equals $10. What's the profit-maximizing output (q)? (3 points). Note: managers maximize profits by setting MR=MC and under perfectly competitive markets, MR=Price. Thus, maximize profit by producing a where P=MC.(2 points) (c) What is the profit? (3 points) TOTAL COST (TC) - the...
2. Consider the total cost function TC = TC(Q), where Q is output. Show that average total cost, ATG, reaches its minimum point where MC ATC.
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)...
produce 16000 units of output. What is the cost minimizing combination of capital and labor for this firm? What is it's minimized cost of producing 16000 units of output? 2.2 Problem 2 In a perfectly competitive market all firms (including potential entrants) have a total cost function given by TC(Q) = 100Q - QP + ', where Q is that firm's output. Therefore, each firm's average cost function is AC(Q) = 100-Q+ Qand each firm's marginal cost function is given...
Bob's Barbershop has a daily short-run cost given by C(q) = 5 + 10 +0.52% where q is the number of haircuts. The associated marginal cost is given by MC = 10 + q. Suppose the market for haircuts is perfectly competitive and the current market equilibrium price of a haircut is $25. a. How many haircuts should Bob's Barbershop give each day if it wants to maximize profit? b. If it maximizes profit, how much profit will Bob's Barbershop...
7. Assume that the long-run production function can be expressed as Q-SKL? Where Q is quantity of output, K is the quantity of capital and L is the quantity of labor. If capital is fixed at 10 units in the short run then the short-run production function is: Q=10KL b. Q=50KL? Q=10L? d. 0=50L Q=500KL 8. For a linear total cost function: a. MC will be downward sloping b. MC = AVC c. AVC is upward sloping and linear d....
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