4. Milk, a consumer staple, is an example of a homogeneous good that many firms produce....
4. Milk, a consumer staple, is an example of a homogeneous good that many firms produce. The total cost function is estimated for a typical dairy farmer as: 1 C(q) = 542 + 2q +3 (a) (12 points) Calculate the price below which the firm will shut down in the short run (b) (12 points) Let the industry consist of 6 identical firms and let the market demand be Q = 5-p, calculate the short-run equilibrium quantity in the market....
4. Milk, a consumer staple, is an example of a homogeneous good that many firms produce. The total cost function is estimated for a typical dairy farmer as: C(q) = 342+24+3 (a) (12 points) Calculate the price below which the firm will shut down in the short run (b) (12 points) Let the industry consist of 6 identical firms and let the market demand be Q = 5-P, calculate the short-run equilibrium quantity in the market. (Round to two decimal...
Continuing with the example of Canadian lime manufacturing, suppose that the firms are identical and face a variable cost curve: VC = 409 +0.59" and have fixed costs of $50. 1. Calculate the price below which the firm will shut down in the short run 2. Let the industry consist of 12 firms and let the market demand be Q = 360 - p, calculate the short-run equilibrium price in the market. 3. Using the market price in the previous...
Suppose there is a monopolistically competitive market with n identical firms, such that each firm produces the same quantity, q. Further, the market is in the monopolistically competitive long-run equilibrium. You are given the following: Inverse market demand: P 10-Q Total market output: Qnxq Marginal revenue: MR 10n+ 1)xq Total cost: C(q)-5+q Marginal cost: MC 2xq In long-run equilibrium, each firm earns zero economic profit. In long-run equilibrium, the number of firms, n, is and each firm produces units) of...
Question No. 3 (25pts.) The market for wheat consists of 500 identical firms, each with a total cost function given as: TC = 90,000 + 0.0000 1Q2 where Q is measured in bushels per year. The market demand curve for wheat is: Q = 90,000,000-20,000,OOOP where P is the price per bushel. A. Determine the short-run equilibrium price and quantity that would exist in the market. Calculate the profit maximizing quantity for the individual firm. Calculate the firm's short-run profit...
Question 2 The tortilla industry commissions you to examine the outlook for firms selling tortillas. There are currently twenty, identical price-taking firms in this perfectly competitive market. Each firm has a short-run cost function of STC(Q) = 9+ 2Q + . When the price is P, the total quantity demanded is given by Q(P) = 100 – 2P . (a) Assuming all fixed costs are sunk, find the short-run supply curve for a typical firm. (b) In the short run,...
9.1. DanielArcher's Midland farm produces com. His cost function (where total cost is measured in cents) is calculated to be + 100g + 1000 c(4) 480 where q is the output level (measured in bushels). The market price of com is 220 cents per bushel which Midland farm, as a competitive pro- ducer, takes as given. How many bushels will Daniel produce? What is Midland farm's shutdown price? 9.2. In Takeout Town, there are 45 identical pizza delivery firms, each...
Short-run Equilibrium: Bumper sticker firms produce bumper stickers in a perfectly competitive market. Each identical firm has a short-run total cost function equal to: STC (Q) = 3 + 2q + 2Q2. Suppose that there are 100 firms, and the market demand is D(P) = 100 - 5P where D(P) is the quantity consumed in the market when the market price is P. 1. What is the short-run equilibrium price? 2. How much does each firm produce? 3. Are they...
1. The bolt-making industry has 20 identical firms, each one has a short-run total cost function TC(q) 16 + q2 (a) What is the short-run supply of each firm? (b) The market demand is QD(p) = 110-p. What is the short-run equilibrium price and quantity supplied by each firm? Calculate each firm's profit. (c) Suppose that the number of firms increases to 25. What is the short-run equilibrium price and quantity supplied by each firm? Calculate each firm's profit
2. A competitive industry has 12 identical firms, each one has a total variable cost function TVC(a) 402 and a marginal cost function MC(a) 40+q, the firm's fixed cost.s are entirely non-sunk (that is, must be paid only if q >0) and equal to 50. (a) Calculate the price below which the firm will produce q 0. (b) The market demand is QD(p) 360-2p. What is the short-run equilibrium price and quantity supplied by each firm? Calculate each firm's proft...