13. If Firm A operates in a perfectly competitive industry, with market price = $1,200/unit. If Firm A’s total cost function is given by TC(q)= 20q^2+ 80q + 200, find Firm A’s profit maximizing level of output.
14. Using the information from the above question: is the market in which Firm A is selling its output currently in long run equilibrium?
13) P = 1200$/ unit
Q = ?
Total revenue = TR = P*Q = 1200Q
Marginal revenue = d(TR)/dQ = d(1200Q)/dQ
MR = 1200$
Total cost = 2 Q2+80Q+200 = TC
Marginal cost = d(TC)/dQ = d(2Q2+80Q+200)/dQ
MC = 4Q+80
For profit maximization output level
MC = MR
4Q+80 = 1200
Q = 280
14) The firm is in the long run as
MR = 1200
P = 1200
MC = 4Q+80 = 4*280+80 = 1200
When the firm is having P = MR = MC than it is in long run equilibrium as they will not generate any economic profits.
Here Firm A is also in long run equilibrium as P = MC= MR
13. If Firm A operates in a perfectly competitive industry, with market price = $1,200/unit. If...
If Firm A opertes in a perfectly competitive industry, with market price = $1,200/unit. If Firm A's total cost function is given by TC(g)-20 80q 200, find Firm A's profit maximizing level of output. Using the information from the above question: is the market in which Firm A is selling its output currently in long run equilibrium?
2. A firm operates in a perfectly competitive industry. Suppose it has a short run total cost function given by TC= 10000 +0.04q?. If the market price is 56, the firm's profit-maximizing quantity is?
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a firm in perfectly competitive market sells all its products
Q at constant price p
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the
firm faces a constant price (P) of $60
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