2) A perfectly competitive market has demand given by Qp = 4850 – 70P. There are four firms in this market, and each firm has a different cost structure as shown below: TC (q) = 5000 + 4q + 0.02q2 MC(q) = 4+0.04q Client 9 & Co. TC(q) = 6000 + q + 0.025q? MC(q) = 1+ 0.05q BTVS Inc The Fred Firm TC(q) = 5000 + 29 + 0.02q? MC(q) = 2 + 0.04q TC(q) = 15000 + 5q + 0.005q? MC(q) = 5 + 0.01q OTT (a) What is the market price and market quantity? Hint: Start by determining the individual supply for each firm, and then add them to get the market supply (b) How many units does each firm produce, and how much profit does cach firm make? (c) In the long-run competitive equilibrium, what is the market price and market quantity? (d) In the long-run competitive equilibrium, how many units does cach firm produce, and how much profit does cach firm make?

2) A perfectly competitive market has demand given by Qp = 4850 – 70P. There are four firms in this market, and each firm has a different cost structure as shown below: TC (q) = 5000 + 4q + 0.02q2 MC(q) = 4+0.04q Client 9 & Co. TC(q) = 6000 + q + 0.025q? MC(q) = 1+ 0.05q BTVS Inc The Fred Firm TC(q) = 5000 + 29 + 0.02q? MC(q) = 2 + 0.04q TC(q) = 15000 + 5q + 0.005q? MC(q) = 5 + 0.01q OTT (a) What is the market price and market quantity? Hint: Start by determining the individual supply for each firm, and then add them to get the market supply (b) How many units does each firm produce, and how much profit does cach firm make? (c) In the long-run competitive equilibrium, what is the market price and market quantity? (d) In the long-run competitive equilibrium, how many units does cach firm produce, and how much profit does cach firm make?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter10: Prices, Output, And Strategy: Pure And Monopolistic Competition

Section: Chapter Questions

Problem 9E

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Q3_A The Break even Analysis of firm show that: BEP = 1000 FC = 10,000 $ P = 3% of the quantity of zero profit. A) The point of intersection of TR with TC is at the cost point of $ 45,000 for TR. B) At the point where (zero units sold) TC equals $ 5,000 C) the start of the line drawing for TR is at cost point $ 0 D) the value UVC for the product in question equals $ 10) E)the FC value in a point for BFP equals $ 10,000 For the given choices, showing which one is True and which one is False, correcting the False ones and given a reasonable reason for the True. Write your answer below:
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1. Suppose there is a firm called Sebastian Industries that produces a product known as “Ortizs”. At q=0, the total cost is $200 and then increases by $20 for each additional unit produced. What is the FC? a) $0 b) $50 c)$100 d) $200 e) Not enough information 2. For q=10, what is the ATC? a) $0 b) $15 c) $30 d) $40 e) $55 3. Which of the following is NOT an example of a sunk cost? a) Purchase of a hamburger after starting to eat it b) Purchase of a movie ticket thirty minutes after the film has started c) Purchase of an item on Amazon...fifty days after delivery d) Purchase of a gallon of milk after you start drinking it e) Purchase of a new TV set with the receipt 4. Suppose we have another firm known as Sepanyan Corporation which makes a product known as Yeghias. Suppose the firm’s FC=$8,000 and its TC=$10,000 and its AVC=$5. What is the ATC? a) $25.00 b) $67.50 c) $100.25 d) $200 e) Not enough information 5. Which of the following is true concerning a competitive firm? a) It…
6. A firm manufactures and markets a product that sells for Birr 20 per unit. Fixed costs associated with activity total Birr 40,000 a month, while variable cost per unit is Birr 10. A maximum of 10,000 units can be produced and sold. Required: a) Drive the TR, TC and Total profit functions. b) Sketch the TR, TC and Total profit functions in the same coordinate system. c) What is the Break-even point (in terms of quantity and sales volume)? d) Drives the new TC, Total profit functions given that FC is increased by Birr 10,000 a month, and calculate the new break-even point. e) Drive the new TC and Total profit functions given that unit variable costs is decreased by 20% and calculate the new Break-even point. f) Drive the new TR and Total profits functions given that the unit selling price increases by 20% and calculate the new break-even point. g) What is the relationship that you may inter from BEP& FC, P& BEP and V& BEP? h) Assume selling prince increases by 10%…