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 to use this new technology?
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A representative firm in a perfectly competitive, constant cost
industry has a cost function T C...
The first picture below depicts the cost curves for a representative firm in this perfectly competitive industry. Initia...
The first picture below depicts the cost curves for a
representative firm in this perfectly competitive industry.
Initially, there are 100 firms. The second picture depicts market
demand.
A) Suppose that the firm produces 300 units of output, how much
are their total costs?
B) What is the short-run equilibrium price?
C) At the short-run equilibrium price, what is the quantity
produced by each firm?
D) At the short-run equilibrium price, what is per-firm
profit?
E) In the long-run,...
Each firm in a perfectly competitive market has long run average cost represented as AC(q) =...
Each firm in a perfectly competitive market has long run average cost represented as AC(q) = 100q- 10+100/q. Long run marginal cost is MC=200q-10. The market demand is Qd = 2150-5P. Find the long run equilibrium output per firm, q*, the long run equilibrium price, P*, and the number of firms in the industry, n*. P = 190; Q = 1200; q =1 , n = 1200
Suppose that a particular firm is in a perfectly competitive constant-cost industry. When it is using...
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...
1. Suppose firms in a perfectly competitive, constant cost (i.e., flat LR supply curve), industry face...
1. Suppose firms in a perfectly competitive, constant cost (i.e., flat LR supply curve), industry face monthly demand given by Qp = 1000 - P and have access to a production technology that yields a cost function TC(Q:) = 40? + 100Qi + 100 where Q denotes units produced per month. Assume the only difference between short-run and long-run costs is T C(0) = 100 in the short run and TC(O) = 0 in the long run (which is consistent...
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...
1. (18pts) Suppose there are 100 firms in a perfectly competitive industry. Short run marginal costs...
1. (18pts) Suppose there are 100 firms in a perfectly competitive industry. Short run marginal costs for each firm are given by SMC = q + 2 and market demand is given by Qd = 1000-20P (5pts) Calculate the short run equilibrium price and quantity for each firm.. b. (3pts) Suppose each firm has a U-shaped, long-run average cost curve that reaches a minimum of $10. Calculate the long run equilibrium price and the total industry output.. (4pts) What is...
37. If every firm in a perfectly competitive industry experiences the same technological improvement, then A....
37. If every firm in a perfectly competitive industry experiences the same technological improvement, then A. the firm's short-run supply curves will shift to the right. B. the industry's short-run supply curve will shift to the right. C. the industry's long-run supply curve will shift downward or to the right D. All of the above statements are true. E. Only A and B are true. D, a, ap, o, 38. In a perfectly competitive, constant-cost industry, the long-run equilibrium price...
1. (20p) Suppose that, in a perfectly competitive industry, the technology for making the product (by...
1. (20p) Suppose that, in a perfectly competitive industry, the technology for making the product (by any single firm) has the total cost function c(q) = 200 + 4q+ Barriers to entry and exit the market are low and an unlimited number of firms could enter this industry, all with the same total cost function. (a) Compute the long-run equilibrium price in this industry, as well as the amount of output each firm would produce at this price. Explain the...
The canola oil industry is perfectly competitive. Every producer has the following total cost function: LTC...
The canola oil industry is perfectly competitive. Every producer has the following total cost function: LTC = 2Q3 – 15Q2 + 40Q, where Q is measured in tons of canola oil. The corresponding marginal cost function is given by LMC = 6Q2 – 30Q + 40. a. In long-run equilibrium, how much will each firm produce? b. What is the long-run equilibrium price? c. Suppose that the market demand for canola oil is given by Q = 999 – 0.25P....
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...
The first picture below depicts the cost curves for a
representative firm in this perfectly competitive industry.
Initially, there are 100 firms. The second picture depicts market
demand.
A) Suppose that the firm produces 300 units of output, how much
are their total costs?
B) What is the short-run equilibrium price?
C) At the short-run equilibrium price, what is the quantity
produced by each firm?
D) At the short-run equilibrium price, what is per-firm
profit?
E) In the long-run,...
1. Suppose firms in a perfectly competitive, constant cost (i.e., flat LR supply curve), industry face monthly demand given by Qp = 1000 - P and have access to a production technology that yields a cost function TC(Q:) = 40? + 100Qi + 100 where Q denotes units produced per month. Assume the only difference between short-run and long-run costs is T C(0) = 100 in the short run and TC(O) = 0 in the long run (which is consistent...
1. (18pts) Suppose there are 100 firms in a perfectly competitive industry. Short run marginal costs for each firm are given by SMC = q + 2 and market demand is given by Qd = 1000-20P (5pts) Calculate the short run equilibrium price and quantity for each firm.. b. (3pts) Suppose each firm has a U-shaped, long-run average cost curve that reaches a minimum of $10. Calculate the long run equilibrium price and the total industry output.. (4pts) What is...
37. If every firm in a perfectly competitive industry experiences the same technological improvement, then A. the firm's short-run supply curves will shift to the right. B. the industry's short-run supply curve will shift to the right. C. the industry's long-run supply curve will shift downward or to the right D. All of the above statements are true. E. Only A and B are true. D, a, ap, o, 38. In a perfectly competitive, constant-cost industry, the long-run equilibrium price...
1. (20p) Suppose that, in a perfectly competitive industry, the technology for making the product (by any single firm) has the total cost function c(q) = 200 + 4q+ Barriers to entry and exit the market are low and an unlimited number of firms could enter this industry, all with the same total cost function. (a) Compute the long-run equilibrium price in this industry, as well as the amount of output each firm would produce at this price. Explain the...
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