A fully competitive firm has the following short-run cost function c(y)=(y)^3-8(y)^2+30y+5 a. Calculate the firm's marginal...
A fully competitive firm has the following short-run cost function c(y)=(y)^3-8(y)^2+30y+5
a. Calculate the firm's marginal cost function
b. Calculate the firm's average variable cost function
c. Show on a graph the marginal cost function and of the average variable cost function
d. When is the average variable cost falling as output rises? When is the average variable cost rising as output rise?
e. At what output does marginal cost equals average variable cost?
f. At what price does the firm supply zero output?
Not sure I've done these correctly and would like someone to go through them thoroughly. Thanks in advance!!!
Homework Answers
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A fully competitive firm has the following short-run cost
function c(y)=(y)^3-8(y)^2+30y+5
a. Calculate the firm's marginal...
Firm Supply (Chapter 23 in the book) Problem 3. A competitive firm's short-run cost function is...
Firm Supply (Chapter 23 in the book) Problem 3. A competitive firm's short-run cost function is c() - y - 8y2 + 30y + 5. The marginal cost of this cost function is MC() - 3y2-16y + 30. (a) What is the firm's average variable cost function, AVC(y)? (b) On the graph, plot and label average variable cost AVC(y) and marginal cost MC(y) functions. (c) Average cost is decreasing as output rises if output is less than what number? (d)...
14. Refer to Figure 13-8. Which of the following statements is correct? a. Marginal cost is...
14. Refer to Figure 13-8. Which of the following statements is correct? a. Marginal cost is rising for quantities higher than D because marginal cost is higher than average total cost. b. Average variable cost is declining for quantities less than B because marginal cost is lower than average variable cost. c. Marginal cost is minimized at B because at that quantity, marginal cost equals average variable cost. d. All of the above are correct. 15. When marginal cost is...
15. When marginal cost is less than average total cost, a. marginal cost must be falling....
15. When marginal cost is less than average total cost, a. marginal cost must be falling. b. average variable cost must be falling. c. average total cost is falling. d. average total cost is rising. 16. Which of the following is not a characteristic of a competitive market? a. Buyers and sellers are price takers. b. Each firm sells a virtually identical product. c. Entry is limited d. Each firm chooses an output level that maximizes profits. 17. If a...
need help with 5 and 6 Suppose a perfectly competitive firm's cost function is C(q)-4q*+16. Marginal cost for the firm...
need help with 5 and 6
Suppose a perfectly competitive firm's cost function is C(q)-4q*+16. Marginal cost for the firm is given by MC=8q. 1) Find equations for variable cost, fixed cost, average total cost, average variable cost and average fixed cost for this firm. Illustrate on a graph the firm's average variable cost curve, average total cost curve, and marginal cost curve. 2) Find the outputs that minimize average total cost, average variable cost and average fixed cost. 3)...
Question 4 Consider the Sunshine Company, a perfectly competitive firm with the following cost function TC...
Question 4 Consider the Sunshine Company, a perfectly competitive firm with the following cost function TC 12006Q + 202 where Q is the firm's output per day. a) Find the firm's marginal cost function. [2 marks] C b) If the price of Sunshine's product equals $66, how many units per day should the firm produce? [4 marks] c) Find the firm's average variable cost function. [3 marks] d) Is average variable cost at the quantity you calculated in part b)...
competitive firm is the . 4. the vert Mive is atroduction. The short-run supply curve of...
competitive firm is the . 4. the vert Mive is atroduction. The short-run supply curve of ortion of its short-tun marginal cost curve that is competitive firm in the above its average variable cost curve, The o ward sloping an u petitive firm is the portion of its short-run marginal cost curve that supply curve of a Leuward-sloping and lies above its long-run average cost curve. Example: A firm has the long-run cost function cy) = 2y + 200 for...
(c)Average variable cost is falling as output rises if output is less than.. . . and...
(c)Average variable cost is falling as output rises if output is less than.. . . and rising as output rises if output is greater than............ (d) Marginal cost equals average variable cost when output is......... () The firm will supply zero output if the price is less than....... (f) The smlest positive amount that the firm will ever supply at any price is At . . . what price would the firm supply exactly 6 units of output? .. ....
In the short run, a perfectly competitive firm produces output using capital services (a fixed input)...
In the short run, a perfectly competitive firm produces output using capital services (a fixed input) and labour services (a variable input). At its profit-maximizing level of output, the marginal product of labour is equal to the average product of labour. a. What is the relationship between this firm's average variable cost and its marginal cost? O Average variable cost is higher than marginal cost O Average variable cost equals marginal cost O Average variable cost is less than marginal...
8. , which of the following statements is (are) correct? (x) The marginal cost of the...
8. , which of the following statements is (are) correct? (x) The marginal cost of the fifth unit equals the variable cost of five units minus the variable cost of four units (y) The variable cost of 50 units equals the average variable cost of 50 units times 50. (z) If marginal cost is rising, then average variable cost is rising if marginal cost exceeds average variable cost. A. (x), (y) and (z) B. (x) and (y) only C. (x)...
Suppose a perfectly competitive firm has the short-run cost function C = 125 + q2. Use...
Suppose a perfectly competitive firm has the short-run cost function C = 125 + q2. Use the derivative formula or marginal cost to determine the firm’s output level and profit at prices of $30 and $20. At what price does the firm reach the shut-down point?
Firm Supply (Chapter 23 in the book) Problem 3. A competitive firm's short-run cost function is c() - y - 8y2 + 30y + 5. The marginal cost of this cost function is MC() - 3y2-16y + 30. (a) What is the firm's average variable cost function, AVC(y)? (b) On the graph, plot and label average variable cost AVC(y) and marginal cost MC(y) functions. (c) Average cost is decreasing as output rises if output is less than what number? (d)...
14. Refer to Figure 13-8. Which of the following statements is correct? a. Marginal cost is rising for quantities higher than D because marginal cost is higher than average total cost. b. Average variable cost is declining for quantities less than B because marginal cost is lower than average variable cost. c. Marginal cost is minimized at B because at that quantity, marginal cost equals average variable cost. d. All of the above are correct. 15. When marginal cost is...
15. When marginal cost is less than average total cost, a. marginal cost must be falling. b. average variable cost must be falling. c. average total cost is falling. d. average total cost is rising. 16. Which of the following is not a characteristic of a competitive market? a. Buyers and sellers are price takers. b. Each firm sells a virtually identical product. c. Entry is limited d. Each firm chooses an output level that maximizes profits. 17. If a...
need help with 5 and 6
Suppose a perfectly competitive firm's cost function is C(q)-4q*+16. Marginal cost for the firm is given by MC=8q. 1) Find equations for variable cost, fixed cost, average total cost, average variable cost and average fixed cost for this firm. Illustrate on a graph the firm's average variable cost curve, average total cost curve, and marginal cost curve. 2) Find the outputs that minimize average total cost, average variable cost and average fixed cost. 3)...
Question 4 Consider the Sunshine Company, a perfectly competitive firm with the following cost function TC 12006Q + 202 where Q is the firm's output per day. a) Find the firm's marginal cost function. [2 marks] C b) If the price of Sunshine's product equals $66, how many units per day should the firm produce? [4 marks] c) Find the firm's average variable cost function. [3 marks] d) Is average variable cost at the quantity you calculated in part b)...
competitive firm is the . 4. the vert Mive is atroduction. The short-run supply curve of ortion of its short-tun marginal cost curve that is competitive firm in the above its average variable cost curve, The o ward sloping an u petitive firm is the portion of its short-run marginal cost curve that supply curve of a Leuward-sloping and lies above its long-run average cost curve. Example: A firm has the long-run cost function cy) = 2y + 200 for...
(c)Average variable cost is falling as output rises if output is less than.. . . and rising as output rises if output is greater than............ (d) Marginal cost equals average variable cost when output is......... () The firm will supply zero output if the price is less than....... (f) The smlest positive amount that the firm will ever supply at any price is At . . . what price would the firm supply exactly 6 units of output? .. ....
In the short run, a perfectly competitive firm produces output using capital services (a fixed input) and labour services (a variable input). At its profit-maximizing level of output, the marginal product of labour is equal to the average product of labour. a. What is the relationship between this firm's average variable cost and its marginal cost? O Average variable cost is higher than marginal cost O Average variable cost equals marginal cost O Average variable cost is less than marginal...
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