Consider a competitive market in which the market demand for the product is expressed as: P...
Consider a competitive market in which the market demand for the product is expressed as: P = 104 - 0.002Q, and the supply of the product is expressed as: P = 4 + 0.0005Q (make sure to count the zeros correctly). The typical firm in this market has a marginal cost of MC = 4 + 0.8q.
a. Determine the equilibrium market price and output. Calculate the consumer surplus and the producer surplus at equilibrium in the industry.
b. Determine the output of the typical firm, given your answer to part (a) above. How many firms are there in the industry?
c. If the market demand were to increase to P = 124 - 0.002Q, what would the new price and output in the market be in the short-run? What would the new output for the typical firm be?
d. If the original equilibrium given in (a) represented a long-run equilibrium condition in the market (assuming constant cost industry), would the new equilibrium in (c) represent a new long-run equilibrium for the typical firm? Explain.
e. To be in the long-run equilibrium with the new demand, how many firms would enter into or leave from the industry? Show your work.
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Consider a competitive market in which the market demand for the
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10 pts Question 2 Consider a competitive market in which the market demand for the product...
10 pts Question 2 Consider a competitive market in which the market demand for the product is expressed as: P-86- 0.00040, and the supply of the product is expressed as: P-6 +0.0006Q. The typical firm in this market has a marginal cost of MC - 6 +0.969. a. Determine the equilibrium market price and output. Calculate the consumer surplus and the producer surplus at equilibrium in the industry. (2+2+2 - 6 points) b. Determine the output of the typical firm,...
18 pts Question 1 Refer to Question 2 of Homework 6. Consider a competitive market in which the market demand for t...
18 pts Question 1 Refer to Question 2 of Homework 6. Consider a competitive market in which the market demand for the product is expressed as: P = 86- 0.0004Q, and the supply of the product is expressed as: P-6+ 0.00060. The typical form in this market has a marginal cost of MC = 6 + 0.969. c. If the market demand were to increase to P-90 -0.0004Q, what would the new price and output in the market be in...
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...
typical perfect competitive firm in the coffee market is given by the The cost curve for...
typical perfect competitive firm in the coffee market is given by the The cost curve for a following 1284qi + 2q% TC The market demand curve for coffee is given by the following P 84 2q (a) i) Find the long ru and quantity, output for each firm, the number of firms in the industry and the level of producer and consumer surplus. Show your answer in a clear well-labelled diagram (ii) What is the value of own price elasticity...
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...
The cost curve for a typical perfect competitive firm in the coffee market is given by...
The cost curve for a typical perfect competitive firm in the coffee market is given by the following TC 128+4g+2q The market demand curve for coffee is given by the following P=84-2q (a) (i) Find the long run competitive 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. Show your answer in a clear well-labelled diagram (ii) What is the value...
Consider the following two graphs for a product produced in a perfectly competitive market (think, for...
Consider the following two graphs for a product produced in a perfectly competitive market (think, for example, corn or oats). The graph on top shows the market supply and demand functions for this product. The one at the bottom is the cost curves for a typical firm in the industry producing this product. These cost curves pertain to long run. As you know, in the long run firms can change the amounts of invested capital, new firms can enter the...
How to do this question ? B2-(13 MARKS) Consider a perfectly competitive industry in which each...
How to do this question ?
B2-(13 MARKS) Consider a perfectly competitive industry in which each firm i has a total cost function given by the equation: TC,- 128+ 4q+ 2q. Further, assume that the industry demand finction is given by the following: P = 84-20 a) Describe the long nun market equilibrium. That is, identify the equilibrium price and quantity output for each firm, the number of fims in the industry and the level of producer and consumer surplus....
31 In perfectly competitive industries: A. the shont-run market supply curves are positively sloped в. long-rusniustry...
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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...
10 pts Question 2 Consider a competitive market in which the market demand for the product is expressed as: P-86- 0.00040, and the supply of the product is expressed as: P-6 +0.0006Q. The typical firm in this market has a marginal cost of MC - 6 +0.969. a. Determine the equilibrium market price and output. Calculate the consumer surplus and the producer surplus at equilibrium in the industry. (2+2+2 - 6 points) b. Determine the output of the typical firm,...
18 pts Question 1 Refer to Question 2 of Homework 6. Consider a competitive market in which the market demand for the product is expressed as: P = 86- 0.0004Q, and the supply of the product is expressed as: P-6+ 0.00060. The typical form in this market has a marginal cost of MC = 6 + 0.969. c. If the market demand were to increase to P-90 -0.0004Q, what would the new price and output in the market be in...
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...
typical perfect competitive firm in the coffee market is given by the The cost curve for a following 1284qi + 2q% TC The market demand curve for coffee is given by the following P 84 2q (a) i) Find the long ru and quantity, output for each firm, the number of firms in the industry and the level of producer and consumer surplus. Show your answer in a clear well-labelled diagram (ii) What is the value of own price elasticity...
The cost curve for a typical perfect competitive firm in the coffee market is given by the following TC 128+4g+2q The market demand curve for coffee is given by the following P=84-2q (a) (i) Find the long run competitive 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. Show your answer in a clear well-labelled diagram (ii) What is the value...
Consider the following two graphs for a product produced in a perfectly competitive market (think, for example, corn or oats). The graph on top shows the market supply and demand functions for this product. The one at the bottom is the cost curves for a typical firm in the industry producing this product. These cost curves pertain to long run. As you know, in the long run firms can change the amounts of invested capital, new firms can enter the...
How to do this question ?
B2-(13 MARKS) Consider a perfectly competitive industry in which each firm i has a total cost function given by the equation: TC,- 128+ 4q+ 2q. Further, assume that the industry demand finction is given by the following: P = 84-20 a) Describe the long nun market equilibrium. That is, identify the equilibrium price and quantity output for each firm, the number of fims in the industry and the level of producer and consumer surplus....
31 In perfectly competitive industries: A. the shont-run market supply curves are positively sloped в. long-rusniustry supply curve,are positively sloped. C. the short-run D. All of the above E. Only B and C are correct market supply curves are more clastic than the long-run industry supply curvers s3. Assame a perfectly-competitive, increasing-cost industry composed of identical firms is initially in long-run equilibrium. Given a decrease in demand, in the short ran: equilbrium price decreases, equilibrium output increases, the output of...
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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