3. The industry producing and selling wooden pallets is comprised of 100 identical firmseach of which has a short-run total cost function given byC's = 0.5g² + 10g + 5,where q is output of (standardized) wooden pallets per day.(a) What is the equation of the short-run supply curve for each firm?(b) What is the equation of the short-run supply curve for the market as a whole?3 Suppose the demand for total wooden-pallet production is given byQ = 1 100 – 50p.(c) What will be the equilibrium in this market? What will each firm's short-run profitbe?(d) Draw an appropriate graph showing the determination of the part-(c) marketequilibrium and use it to find the associated total consumer and producer surplus.(e) Show that the total producer surplus you calculated in part (d) is equal to totalindustry short-run profit plus total industry short-run fixed cost.

We are given the Total Cost function , We know that the rising portion of the MC curve above the…

Answered: 3. The industry producing and selling…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A foodstuff firm has variable cost function: VC = 2q(q+1). The foodstuff market is considered as perfect competition market with many firms that are doing business. a. Find the short run supply curve of the firm? b. The firm is break even at total revenue of $702. Calculate the firm's price and output at this break-even point? c. What is the firm's fixed cost? d. Calculate the price at which firm will shut-down its business?
Consider a firm whose total cost function is 2q3 – 6q2 + 13q.a. If the price of a unit of output is $13, what is the profit-maximizing value of q?b. Find the average cost function of the firm? What is the firm’s minimum average cost?c. What is the equilibrium price of output? How much does each firm produce at equilibriumprice? What is the firm’s short-run and long-run average cost at this quantity? What is eachfirm’s profit at the equilibrium price and quantity?
1. There are 300 identical firms in a perfectly competitive market, the price of the output is p, the short-run cost function of a typical firm in the market is as follows: C(q) = q³-2q²+2q+10 a. What is this firm's (short-run) marginal cost function? b. What is this firm's (short-run) average variable cost function? c. What is this firm's (short-run) supply function? d. If p = 17, what is this firm's maximum profit?
A price-taking firm's variable cost function is VC = 20³, where Q is its output per week. It has a sunk fixed cost of $108 per week. Its marginal cost is MC = 6Q². a. What is the firm's supply function when the $108 fixed cost is sunk? Instructions: Enter your answer as a whole number. Q = (P/6) 0.5 for Pz $| b. What is the firm's supply function when the fixed cost is avoidable? Instructions: Enter your answer as a whole number. Q = (P/6) 0.5 for Pz $ 216 ✪ 0
A firm's profit function is x(q) = R(q)- C(q)= 180g - (685 + 20g + 10g) What is the positive output level that maximizes the firm's profit (or minimizes its loss)? What is the firm's revenue, variable cost, and profit? Should it operate or shut down in the short run? The output level at which the firm's profit is maximized is q=. (Enter your response as a whole number.) At this level of output, the firm's revenue (R) is $. (Enter your response as a whole number.) At the profit-maximizing level of output, the firm's variable cost (VC) is S. (Enter your response as a whole number.) Profit (x) is S. (Enter your response as a whole number and include a minus sign if necessary.) The firm should produce in the short run.
A firm operates in a perfectly competitive industry with the following totoal production function: π (q) TR(q) - TC(q) = 20q - TC(q) where TC(q) = 50 + 4q + 2q2 a) find the firm's demand and supply functions b)Find the profit maximizing output. Is the firm making above normal profits? c)What is the long-run equilibrium?
1. Suppose there are 100 identical firms in the perfectly competitive notecard industry. Each firm has a short-run total cost curve of the form: 1 C = −q³ +0.2q² +4q +10 300 a) Calculate the firm's short-run supply curve with q (the number of crates of notecards) as a function of market price (P). b) Calculate the industry supply curve for the (Answer: QS = 1000√P - 2000) c) Suppose market demand is given by: Q 200P 8,000. What will be the equilibrium price-quantity combination? (Answer: P = $25; Q = 3000 units) d) Suppose everyone starts writing more research papers and the new market demand is given by: Q =— 200P + 10,000. What is the new price-quantity equilibrium? How much profit does each firm make? (Answer: ₁ = $576,14) == 100 firms in this industry.
If the short-run marginal and average variable cost curves for a competitive firm are given by SMC = 2 + 4Q and AVC = 2 + 3Q, how many units of output will it produce at a market price of 34? Instructions: Round your answers to the nearest whole number. Q= At what level of fixed cost will this firm earn zero economic profit? $
A firm sells its product in a perfectly competitive market. Its total cost function is: TC = 900 - 20Q + Q2where TC is total cost and Q is output level.a. Find the firm’s average total cost function. b. Find the firm’s average variable cost function. c. Find the firm’s marginal cost function. d. Given the price is $100, what is the profit-maximizing output level? e. Given the price is $100, what is the profit level? f. Over time, is there going to be entry or exit in this competitive market? Why?
2. Consider a market with 90 firms, each firm has a short-run total cost function as follows: TC(q) = 5q2, and a marginal cost function: MC(q) = 10q. Market demand is given by equation Qd(p) = 200 - p. a. What is the fixed cost? Solve the average variable cost function in the short-run. b. What is the supply function of each firm? c. Solve for the short-run equilibrium outcome: P*, Q* and q*. d. What is one firm's economic profit in this market? e. Consider a different market structure, where there is only one firm, interpreted as a monopolist, and then critically discuss the impact on equilibrium price and quantity. Discuss total surplus for these two types of market structures.
2. Consider a market with 90 firms, each firm has a short-run total cost function as follows: TC(q) = 5q², and a marginal cost function: MC(q) = 10q. Market demand is given by equation Q“(p) = 200 - p. a. What is the fixed cost? Solve the average variable cost function in the short-run. b. What is the supply function of each firm? c. Solve for the short-run equilibrium outcome: P*, Q* and q*. d. What is one firm's economic profit in this market? e. Consider a different market structure, where there is only one firm, interpreted as a monopolist, and then critically discuss the impact on equilibrium price and quantity Discuss total surplus for these two types of market structures.
You are a business manager working for a firm in a purely competitive market and you just hired a summer intern who does not understand how to derive the firms’ short run supply curve from the firms’ marginal cost curve. a)Please explain to the intern how the short run supply curve is derived from the firm’s marginal cost curve. Be specific. b.) Please explain to the intern the characteristics of long run equilibrium of a purely competitive firm and how operating in a purely competitive market might impact the decision-making of the firm. Please include the implications of long-run equilibrium for productive and allocative efficiency. Please include the 3 assumptions, as well as the implications for economic profit, productive efficiency and allocative efficiency.

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