Given the demand curve of P=60-3Q and a long-run supply curve is perfectly elastic at $4 per unit, what is the output level produced by the competitive industry and what would consumer surplus be? Use a diagram to illustrate your answer.
Given the demand curve of P=60-3Q and a long-run supply curve is perfectly elastic at $4...
Suppose that leather is sold in a perfectly competitive industry. The industry short-run supply curve (marginal cost curve) is P = MC = 3Q. The demand for leather hides is given by Q = 60 − P. a. Find the equilibrium market price and quantity. b. Suppose that the leather tanning releases bad stuff into waterways. The external marginal cost is $5 per unit. Calculate the socially optimal level of output and price for the tanning industry. c. What are...
Suppose that leather is sold in a perfectly competitive industry. The industry short-run supply curve (marginal cost curve) is P = MC = 3Q. The demand for leather hides is given by Q = 60 − P. a. Find the equilibrium market price and quantity. b. Suppose that the leather tanning releases bad stuff into waterways. The external marginal cost is $5 per unit. Calculate the socially optimal level of output and price for the tanning industry. c. What are...
QUESTION 40 An increasing-cost industry will have a perfectly inelastic long-run supply curve. an upward sloping supply curve in the long run. a perfectly elastic long-run supply curve. an upward sloping demand curve in the long run. QUESTION 41 An industry in which an increase in output leads to a reduction in long-run per-unit costs is a(n) increasing-cost industry. constant-cost industry. break-even cost industry. decreasing-cost industry.
9. The long-run supply curve of a perfectly competitive firm is given by a horizontal line placed at P = 3 PLN (in a graph where the quantity and price are measured on the X and Y axes, respectively). The market demand is described by QD = 150-5P. a. What is the amount of output produced by the whole industry in the long-run equilibrium? b. Assuming that firms are identical and obtain the minimum average cost for the quantity of...
4. Consider a perfectly elastic supply curve, at p = 10, along with a perfectly inelastic demand curve, at q = 103. Calculate the Consumer Surplus and the Producer Surplus in this market. Show your work. (10%)
3. Consider a perfectly inelastic supply curve at q = 1,013, and a perfectly elastic demand curve at p = 101. A subsidy of $5 per unit is given to producers. Using a diagram, explain how the subsidy is shared between consumers and producers. What is the Deadweight Loss? (30%)
5. Short-run supply and long-run equilibrium Consider the perfectly competitive market for steel. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. COSTS (Dollars per ton) + MC D AVC 0 10 90 100 20 30 40 50 60 70 80 QUANTITY (Thousands of tons) The following diagram shows the...
In a market demand and supply equations are: The demand curve is given as: P = 50 - 3Q The supply curve is given as: P = 10 + 2Q Assuming a perfectly competitive market: 1) What is the equilibrium price and quantity?
(a) All firms in a perfectly competitive industry face the same long-run average cost curve, AC = 0.05q – 5 + 500/q, and the same long-run marginal cost curve given by MC = 0.1q – 5. The market demand for the product of these firms is QD = 100,000 – 10,000P. i.Calculate the equilibrium price and quantity. ii.Assuming the market is in long-run equilibrium, how many firms will be on the market? (b) Suppose the demand for cotton T-shirts is...
Attempts: Keep the Highest: /4 7. Short-run supply and long-run equilibrium Consider the perfectly competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average cost (AC), and average variable cost (AVC) curves shown on the following graph 100 60 AVC 0 10 20 3040 50 60 800100 Use the orange points (square symbol) to plot the initial short-run industry supply curve...