22. Suppose that each firm has the long run cost function c(y) = y2 + 9...
22. Suppose that each firm has the long run cost function c(y) = y2 + 9 for y > 0 and c(0) = 0. The industry demand is given by D(p) = 51 - p. The equilibrium price in the long-run equilibrium of the industry in a perfectly competitive market is:
a. $8 b. $3 c. $5 d. $4 e. $6
Homework Answers
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22. Suppose that each firm has the long run cost function
c(y) = y2 + 9...
i) The long run cost function for each firm in a perfectly competitive market is c(q)...
i) The long run cost function for each firm in a perfectly competitive market is c(q) = 2^1.5+16q^0.5, LMC = 1.59^0.5+ 8q^-0.5, market demand curve is Q=1600-2p. Find price (p) of output and the level of output (q) produced by the firm in a long run equilibrium. Find the long run average cost curve for the firm. ii) what happens in the long run if the market demand curve shifts to Q=160-20p?/ -A competitive industry is in long run equilibrium....
Suppose a firm in a perfectly competitive market has the cost function c(y)=y2 + 2y +4...
Suppose a firm in a perfectly competitive market has the cost function c(y)=y2 + 2y +4 Now suppose that there is a sudden increase in demand that raises the market price to p= 8. If the demand stays at this new level, what will the long-run quantity be for each firm?
Suppose in a competitive market, the long-run cost function of a firm is ?(?) = 0.66874?5⁄4...
Suppose in a competitive market, the long-run cost function of a firm is ?(?) = 0.66874?5⁄4 + 1,280 where x is the output. (a) What is the minimum long-run average cost? At what output level is this attained? (b) Suppose all firms are identical, what is the long-run profit of each firm in the competitive market? What is the long-run equilibrium price? (c) Suppose there are 64,000 consumers each with demand function xd(p) = 625/p2 How many firms exist in...
A representative firm in a perfectly competitive, constant cost industry has a cost function T C...
A representative firm in a perfectly competitive, constant cost industry has a cost function T C = 100+4Q 2+ 100Q. (a) What are this firm fixed cost, variable cost and marginal cost? (b) What is the long-run equilibrium price for this industry? (c) If the market demand is Q = 1000 − P , how many firms will operate in this long-run equilibrium? (d) What is the most that this firm would be willing to pay for the exclusive right...
9. The long-run supply curve of a perfectly competitive firm is given by a horizontal line...
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...
Each firm in a perfectly competitive market has long run average cost represented as AC(q) =...
Each firm in a perfectly competitive market has long run average cost represented as AC(q) = 100q- 10+100/q. Long run marginal cost is MC=200q-10. The market demand is Qd = 2150-5P. Find the long run equilibrium output per firm, q*, the long run equilibrium price, P*, and the number of firms in the industry, n*. P = 190; Q = 1200; q =1 , n = 1200
Suppose a firm in a perfectly competitive market has the cost function c(y)= y2 + 2y...
Suppose a firm in a perfectly competitive market has the cost function c(y)= y2 + 2y +4 Now suppose that there is a sudden increase in demand that raises the market price to p= 8. How much does the firm produce at this price?
13. Suppose all the firms in the industry have a total cost function given by TC(y) = 9+92. What is the long run equilibrium price assuming a sufficiently high demand? Repeat the above but assume the...
13. Suppose all the firms in the industry have a total cost function given by TC(y) = 9+92. What is the long run equilibrium price assuming a sufficiently high demand? Repeat the above but assume there exists a unique (incumbent) firm with a total cost function given by TC(y)- 4 + y2. How much profit will this firm make in long run equilibrium?
13. Suppose all the firms in the industry have a total cost function given by TC(y) =...
Suppose that the long-run total cost function for the typical mushroom producer is given by: TC=wq2...
Suppose that the long-run total cost function for the typical mushroom producer is given by: TC=wq2 -10q+100 Where q represents the output of the typical firm and w represents the hourly wage rate mushroom pickers. The market for mushrooms is perfectly competitive. Suppose also that the demand for mushrooms is given by Q= -1000p+35,000 Where Q is the total quantity demand and P is the market price of mushrooms. 1. If the wage rate for mushroom pickers is $4.00, what...
All firms in a competitive industry have the following (firm-level) long-run total cost curve: C(q) =...
All firms in a competitive industry have the following (firm-level) long-run total cost curve: C(q) = q3–10q2 + 36q where q is the output of the firm. a. Compute the long run equilibrium price. What does the long-run supply curve look like if this is a constant cost industry? Explain. b. Suppose the market demand is given by Q = 111–p. Determine the long-run equilibrium number of firms in the industry.
i) The long run cost function for each firm in a perfectly competitive market is c(q) = 2^1.5+16q^0.5, LMC = 1.59^0.5+ 8q^-0.5, market demand curve is Q=1600-2p. Find price (p) of output and the level of output (q) produced by the firm in a long run equilibrium. Find the long run average cost curve for the firm. ii) what happens in the long run if the market demand curve shifts to Q=160-20p?/ -A competitive industry is in long run equilibrium....
Suppose a firm in a perfectly competitive market has the cost function c(y)=y2 + 2y +4 Now suppose that there is a sudden increase in demand that raises the market price to p= 8. If the demand stays at this new level, what will the long-run quantity be for each firm?
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...
Suppose a firm in a perfectly competitive market has the cost function c(y)= y2 + 2y +4 Now suppose that there is a sudden increase in demand that raises the market price to p= 8. How much does the firm produce at this price?
13. Suppose all the firms in the industry have a total cost function given by TC(y) = 9+92. What is the long run equilibrium price assuming a sufficiently high demand? Repeat the above but assume there exists a unique (incumbent) firm with a total cost function given by TC(y)- 4 + y2. How much profit will this firm make in long run equilibrium?
13. Suppose all the firms in the industry have a total cost function given by TC(y) =...
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