ZuoTi.Pro
Question

Suppose a competitive firm has cost function: C(q) = a + bq + cq2 + dq3,...

  1. Suppose a competitive firm has cost function: C(q) = a + bq + cq2 + dq3, where a,b,c,d are constants.
    1. What is the marginal cost function?
    2. What is the firm’s variable and average cost of output, in terms of q?
    3. What is the firm’s fixed cost?
    4. What is the firm’s profit maximization condition?
business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

0 0
Add a comment
Know the answer?
Add Answer to:
Suppose a competitive firm has cost function: C(q) = a + bq + cq2 + dq3,...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 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)...

  • Suppose a firm has a total cost function, T C = 3/8(Q^2) − 50, and therefore...

    Suppose a firm has a total cost function, T C = 3/8(Q^2) − 50, and therefore marginal costs of MC = 3/4Q. Assume the market for this firm’s goods is perfectly competitive with a market price, P = 24. (a) Given the information above, is the firm in the short-run or long-run? (1 point) (b) Write down the firm’s marginal revenue equation. (1 points) (c) How many units should the firm produce if it wants to maximize profit? (3 points)...

  • 3. Illustrate graphically Suppose that a competitive firm's marginal cost of producing output q is given...

    3. Illustrate graphically Suppose that a competitive firm's marginal cost of producing output q is given by MC(q)= 70+6q Assume that the market price of the firm’s product is $145. A. At what level of output will the firm produce? B. How much is the firm’s producer surplus? C. Illustrate graphically profit maximization point and producer surplus. D. Illustrate this market at a loss. Explain.

  • 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?

  • Assume that a competitive firm has the total cost function: TC=1q3−40q2+740q+1500 Suppose the price of the...

    Assume that a competitive firm has the total cost function: TC=1q3−40q2+740q+1500 Suppose the price of the firm's output (sold in integer units) is $750 per unit. Using calculus and formulas (but no tables and restricting your use of spreadsheets to implementing the quadratic formula) to find a solution, what is the total profit at the optimal integer output level? Please specify your answer as an integer. Hint 1: The first derivative of the total cost function, which is cumulative, is...

  • 1. Suppose a perfectly competitive firm has a cost function described by TC = 200Q +...

    1. Suppose a perfectly competitive firm has a cost function described by TC = 200Q + Q 2 + 225 Each firm’s marginal revenue is $240. a. Find the profit maximizing level of output. b. Is this a short-run or long-run situation? How do you know? c. Assuming that this firm’s total cost curve is the same as all other producers, find the long-run price for this good.

  • 7. Perfectly competitive firm faces P(Q) = P inverse demand curve and its costs are given by a cost function C(Q), a...

    7. Perfectly competitive firm faces P(Q) = P inverse demand curve and its costs are given by a cost function C(Q), assuming that marginal costs are positive. Firm is also taxed at rate t per unit of output. (a) Write down the firm's profit function. Identify the choice variable, and the parameter if the firm maximizes the profit. (b) Write down the FONC for profit maximization. What does this equa- tion solve for? Can you get it explicitly? Discuss. Under...

  • 1. A perfectly competitive firm sells its product for $360/unit and has an average total cost...

    1. A perfectly competitive firm sells its product for $360/unit and has an average total cost function given by: ATC(Q) = 1000/Q + 30 + 1.5Q. a. What are this firm’s fixed costs? Explain. b. Determine this firm’s profit maximizing level of output. c. Calculate this firm’s profits. 2. A perfectly competitive firm sells its product for $200/unit and has a total cost of production given by: C(Q) = 1500 + 40Q+5Q2 . a. What are this firm’s fixed costs?...

  • A firm operates in a perfectly competitive market with a price of P = 50 for...

    A firm operates in a perfectly competitive market with a price of P = 50 for the product. TVC = 0.5Q3 − 18Q2 + 170Q Q (output) TFC = 300. Write an equation expressing the firm’s total revenue (TR) as function of Q. Write an equation expressing the firm’s total cost (TC), as a function of Q. Write an equation expressing the firm’s profit (π), as a function of Q.Find the first-order condition for the firm’s profit-maximization decision. Find the...

  • 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...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT