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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3] Assume several identical firms have the short run production function Q = √40L and pay a wage of 10 for each unit of labor employed. Fixed costs for each firm are 100. The market demand for the good is Qd = 100,000.25P. How many firms are in the industry in the long run?
What quantity will the firm produce if it shuts down in the short run? What will be the profits if this firm shuts down? What quantity will the firm produce to minimize losses in the short run? If this firm chooses to operate at a loss, what will its profits equal? If the cost and revenue numbers in the table will continue permanently, what will this firm choose to do?
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?
To the right is the average total cost curve for a competitive firm. What is the relationship between the average total cost curve (ATC) and the marginal cost curve (MC)? 1.) Using the 3-point curve drawing tool, draw the marginal cost curve for this firm in a competitive market. Label your curve 'MC'. Carefully follow the instructions above and only draw the required object. Price Quantity Average Total Cost Q G
Explain how the following events may affect the profit rate for a U.S. firm and industry (be sure to define your measure(s) of the profit rate) :Consider both the immediate impact and the possible long run implications: (1) across firms within an industry; (2) across industries and (3) across nations please long and mindful answers that covers all three categories. j) Removal of all subsidies to the U.S. agriculture sector k) Reduction in the federal tax rate on profit income
1. Consider a perfectly competitive market with a price of $21, where each firm has a cost function of c(q) = 10 + q + ²q². a) Is the market in long-run equilibrium? Explain why or why not. b) What is the value to a firm of a cost-saving process innovation that reduces the cost function to c(q) = 5 +0.5q²? c) Illustrate this innovation graphically using a well-labeled diagram.
I need solution of a,b,c
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.
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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