Given
C(Q)=600+3Q2
Marginal Cost is obtained by differentiating C(Q) with respect to Q, we get
MC(Q)=6Q
Market price=P=$30
a. What level of output should you produce in the short run?
A perfectly competitive firm sets its output level such that MC=Market price. So,
MC=P
6Q=30
Q=30/6=5 bushel
Level of output in short run=5 bushel
b. What price should you charge in the short run?
Competitive firm is price taker. It will charge the same price as Market price i..e $30 per bushel
c. Will you make any profits in the short run?
Total Revenue=TR=P*Q=30*5=$150
Total Cost=600+3Q2=600+3*52=$675
Profit=TR-TC=150-675=-$525
Firm will make a loss of $525
d. What will happen in the long run?
Firm is making a loss. Firms will start exiting the market. This will start decreasing supply and price will start increasing. In long run firm will operate at minimum ATC and profit will be zero in long run.
You are the manager of Everyday Tomatoes; hence your firm operates in a perfectly competitive market....
You are a manager in a perfectly competitive market. The price in your market is $35. Your total cost curve is C(Q) = 10 + 2Q + .5Q2 and MC = 2 + Q. a. What level of output should you produce in the short run? b. What price should you charge in the short run? c. Will you make any profits in the short run? d. What will happen in the long run?
You are a manager in a perfectly competitive market. The price in your market is $30. Your total cost curve is C(Q) = 10 + 2Q + .5Q2. a. What level of output should you produce in the short run? b. What price should you charge in the short run? c. Will you make any profits in the short run? d. What will happen in the long run? e. How would your answer change if your costs were C(Q) =...
hapter 9 9.1 You are a manager in a perfectly competitive market. The price in your market is $35. Your tota is C(Q)-10+2Q+0.5Q. Marginal cost is 2+Q. (8 points) a. Find the profit-maximizing output in the short.nun. b. What price should you charge in the short-run? c. Will you make any profits in the short-run? If so, find your profit. If not, please explain why yo firm does not make any profits. What will happen in the long run2 d....
6. Short-run perfectly competitive equilibrium Consider a perfectly competitive market for wheat in Philadelphia. There are 80 firms in the industry, each of which has the cost curves shown on the following graph: MC ATC COST (Cents per bushel) AVC 0 5 10 15 20 25 30 35 40 45 50 Demand Supply Curve Equilibrium PRICE (Cents per bushel) 0 400 800 1200 1600 2000 2400 2800 3200 3600 4000 QUANTITY OF OUTPUT (Thousands of bushels) in the short run....
Your company operates in a perfectly competitive market. Your Manager told you that advertising can help you increase your sales in the short run. What kind of advertising campaign you will start for your product and how much gain is expected from an effective advertisement?
3.) A firm sells its product in a perfectly competitive market where other firms charge a price of $40 per unit. The firm's total costs are C(Q) 20+40+202. A. B. C. D. How much output should the firm produce in the short-run? What price should the firm charge in the short-run? what are the firm's short-run profits? What adjustments should be anticipated in the long-run?
5. Your company operates in a perfectly competitive market. Your Manager told you that advertising can help you increase your sales in the short run. What kind of advertising campaign you will start for your product and how much gain is expected from an effective advertisement? (10 marks) Answer:
2. (10 points) You are the manager of a monopolistically competitive firm. The present demand curve you face is P = 100 – 4Q. Your cost function is C(Q) = 50 + 8.5Q2. a. (3 points) What level of output should you choose to maximize profits? b. (2 points) What price should you charge? c. (5 points) What will happen in your market in the long run? Explain.
2. A firm sells its product in a perfectly competitive market where other firms charge a price of $80 per unit. The firm's total costs are C(O) 40 80202 a. How much output should the firm produce in the short run? b. What price should the firm charge in the short run? c. What are the firm's short-run profits? d. What adjustments should be anticipated in the long run?
4. If you are operating a business in a perfectly competitive market. You can sell as much as at the market price. Why can you not simply increase your profits by selling a highest quantity? (10 marks) Answer: 5. Your company operates in a perfectly competitive market. Your Manager told you that advertising can help you increase your sales in the short run. What kind of advertising campaign you will start for your product and how much gain is expected...