[28] Currently, an industry is operating at a point where price = 20, quantity = 10, slope of the demand curve =-1, and marginal cost = 20. Accordingly, the degree of competition in this industry, as measured by the conjectural variation, equals: A. 0. В. C. 1. D. 2.
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- Suppose that a perfectly competitive firm faces a market price of $12 per unit, and at this price the upward-sloping portion of the firm's marginal cost curve crosses its marginal revenue curve at an output level of 1,800 units. If the firm produces 1,800 units, its average variable costs equal $7.00 per unit, and its average fixed costs equal $1.00 per unit. What is the firm's profit-maximizing (or loss-minimizing) output level? What is the amount of its economic profits (or losses) at this output level?Using the table for a firm (NOTE: You should use the rule of profit maximization), Price (S) Q (Demand) TR 26 1 22 2 18 3 14 10 6 4 5 6 TC 26 34 44 56 70 86 MR ΝΑ MC ΝΑ 15. Complete the table. 16. Using the table, draw the demand curve, MR curve, and MC curve in one diagram. 17. Determine the output and price of the profit-maximizing firm. (NOTE: you should explicitly use MR, MC for profit-max condition.) 18. Why can the firm not charge higher than the price you choose in #17? 19. Determine the profit of the proft-maximizing firm. 20. Determine the profit of the proft-maximizing firm in the long run.Part A Equilibrium for the Perfectly Competitive Industry Consider Figure 34.1. Assume that the market described by the figure is perfectly competitive, and MC represents the horizontal summation of marginal cost curves and, therefore, the market supply curve. Use Figure 34.1 to answer the following questions. Figure 34.1 Perfect Competition 12 MC 11 10 9. 3 2- 1- 1 2 3 4 56 7 8 9 10 11 12 QUANTITY 1. What quantity of output will be produced? 2. What price will the market establish? 3. Calculate the amount of the consumer surplus. Darkly shade the area of consumer surplus. 4. Calculate the amount of the producer surplus. Lightly shade the area of producer surplus. COSTS/REVENUE
- 67. In a perfectly competitive market, industry demand is given by Q = 1000 – 20P. The typical firm’s average cost is TC = 300 + Q2 /3, and marginal cost by MC = (2/3)Q. Suppose there are 10 identical firms in the market. What is the market supply? A. 30Q B. 40Q C. 15Q D. 5QIf an industry's long-run average total cost curve has a negative slope over an extended range of quantity (as shown on the diagram here), what is the most likely market structure for this industry? $ Long-run ATC Quantity The industry consists of firms of various sizes. The industry consists of many small firms. The industry is monopolistically competitive. The industry is monopolistic.A competitive industry consists of identical 100 producers, all of whom operate with the identical short-run total cost curve TC(Q) = 60 + 5Q², where Q is the annual output of a fırm. The market demand curve is Qº = 600 – 50P, where P is the market price. %3D 1. What is the each firm's short-run supply curve? 2. What is the short-run industry supply curve? 3. Determine the short-run equilibrium price and quantity in this industry.
- Oscar is one of many farmers growing soybeans in the upper Midwest under purely competitive market conditions. The demand curve for Oscar's soybeans O lies above his marginal revenue curve. O is downward sloping O is perfectly inelastic O coincides with Oscar's marginal revenue curve. 21 P Gtv MacBook Pro F8 F9 吕0 S0 F3 F6 F7 F4 F5 * %231. A competitive industry is composed of 24 identical firms. Each firm has the following marginal cost of production in the short-run: MC = 58 +8Q. Each firm has the following Total Cost of production in the short-run: TC = 2 + 58Q +4Q². Demand for the product is given by the following demand curve: Qd = 1,211 - 2P. a. Explain why each firm will produce where market equilibrium price (Pe) equals the firm's marginal cost of production (MC). b. Derive an equation for the industry supply curve (i.e., Q₁ = .....). c. Find the market equilibrium price and quantity.. d. Are firms in this industry earning profit or losses in the short-run? (Hint: first compute how much output each firm produces). e. Compute the deadweight loss that would be produced if the government placed a $15 per unit tax on suppliers.. f. Who bore the greater burden of the tax, consumers or producers? Explain.Brand X is one of many firms in a competitive industry where each firm has a constant marginal cost of 2 dollars per unit of output. If marginal cost for Brand X rises to 4 dollars per unit and marginal costs of all other firms in the industry stay constant, by how much does the price in the industry increase? a. 2 dollars b. 1 dollar c. 0 dollar d. 2/n, where n is the number of firms in the industry e. None of the above.
- Firm Alpha operates in a perfectly competitive market in a constant-cost industry and is earning negative economic profit. How does Firm Alpha determine its profit-maximizing quantity of output? Explain. Draw correctly labeled side-by-side graphs for Firm Alpha and the market it operates in. Label the axes and all of the following: Market price (PE) and market quantity (QE) The firm's quantity of output (Qe) The firm's average total cost (ATC) Completely shade the area of the firm's total cost. Identify whether the following increase, decrease, or remain constant as the market moves to long-run equilibrium: Market equilibrium quantity Market equilibrium price Assume the product that Firm Alpha produces has a negative externality. Draw the marginal social cost (MSC) on the market graph from part (b). Will the unregulated market produce more or less than the socially optimal quantity? Label the socially optimal quantity (Qso) for the market on your graph from part (b).The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a purely competitive firm that produces novelty ear buds. Assume the market for novelty ear buds is a competitive market and that the price of ear buds is $6.00 per pair. Buddies Production Costs MC ($) Quantity of Ear Buds 5 10 15 20 25 30 35 40 2.00 2.45 3.55 4.00 5.50 5.98 8.52 pairs ATC ($) 2.00 2.00 2.15 2.50 2.80 3.25 3.64 4.25 Check my work Instructions: In part a, enter your answer as the closest given whole number. In parts b-d, round your answers to two decimal places. a. If Buddies wants to maximize profits, how many pairs of ear buds should it produce each week? b. At the profit-maximizing quantity, what is the total cost of producing ear buds? c. If the market price for ear buds is $6 per pair, and Buddies produces the profit-maximizing quantity of ear buds, what will Buddies profit or loss be per week? d. Now assume the market price is $5.50 per pair, and Buddies produces the…Each of 1,000 identical firms in the competitive peanut butter industry has a short-run marginal cost curve given by SMC = 3 + Q. If the demand curve for this industry is P= 12 1,000 ? what will be the short-run loss in producer and consumer surplus if an outbreak of aflatoxin suddenly makes it impossible to produce any peanut butter? Instructions: Round your answers to the nearest whole number. Producer surplus: $ Consumer surplus: $