A competitive market consists of 2,000 identical companies. The short-term production cost function of each one of them is equal to C(q)=4q²+10q+100. a) Find the company's supply curve. b) Find the industry supply curve. c) If the market demand function is Qº=50.000-1.000P, find the price and the volume of profits of the representative company in this market. Analyse the meaning of the company's profit volume.
Q: There is an industry consisting of 12 firms, each with total cost function given by TC(q)…
A: *Hi there , as per our guidelines we are solving first three sub parts of the question . Kindly…
Q: There is a competitive industry with an infinite number of potential firms. All firms have the same…
A: In the Long Run equilibrium price P*, the profits are zero, that is, P* = MC(q) =ATC(q) MC(q) =…
Q: A company active in a free competitive market with a market price equal to 20 per unit has a total…
A: Large number of buyers and sellers: No single buyer or seller has a significant enough market share…
Q: The market for calculators is a perfectly competitive industry facing typical U-shaped ATC, AVC, and…
A: Given that the market for calculators is a perfectly competitive industry with many homogenous firms…
Q: Suppose that a competitive firm's marginal cost of producing output q (MC) is given by Assume that…
A: Competitive Firm and Profit Maximization:In a perfectly competitive market, firms are price-takers,…
Q: Assume that the above cost data is for a perfectly competitive firm. Using this data answer the…
A: Answer to the question is as follows :
Q: The graph below shows a competitive firm's demand and cost curves. Assume that the firm produces at…
A: Option A is correct.Explanation:In a perfect competitive market, the profit-maximizing condition is…
Q: In a competitive market, the long-run demand is given by P = 20 - (0.01)*q Firms in the industry…
A: Given information Long run demand function P = 20 - (0.01)*q Cost function C = q3 - 5q2 + 10q
Q: 3. Suppose that for a product in a competitive market the demand function is p = 1200 – 2x and the…
A: Given Demand function p = 1200-2x ....... (1) and supply function p = 200+2x…
Q: Assume that pencils are manufactured in a perfectly competitive market that is in long-run…
A: Since you have uploaded many questions as per the guidelines we are allowed to solve only first…
Q: The coffee industry is comprised of many firms producing an identical product. Market demand and…
A: An industry comprised of many firms producing an identical product ia a perfect competitive…
Q: Consider a firm in a perfectly competitive market with total costs given by ??=?3 −15?2 +100?+30 a.…
A: Perfectly competitive market is the market where large number of sellers and buyers exchange the…
Q: Exercise 2.9 Firms in a competitive industry have production costs C(q) =q²+20q+100 and the industry…
A: Perfect competition refers to that market structure in which there are many firms and any single…
Q: The wheat industry is comprised of many firms producing an identical product. Market demand and…
A: Firms in perfect competition are price takers. Price is set by market forces of demand and supply.…
Q: Consider the following graph of the average and marginal cost functions for a firm in a perfectly…
A: A perfectly competitive market refers to the market in which there is a large number of buyers or…
Q: Assume a competitive firm faces a market price of $70, a cost curve of! C=0.002q + 30q + 750, MC =…
A: In perfect competition, There exists a large number of buyers and sellers. The firm will produce…
Q: QUESTION 2 The long-run total cost function for producers of mineral water is LRTC (Q) = rQ, where Q…
A: Answer - Part a Answer - Need to find- Long run equilibrium price and quantity Given in the…
Q: Suppose that the total cost function of a firm is given as follows; TC = 500 + 2Q2 And the price…
A: A rational producer attempts to maximize his/her/their profit in the course of production by…
Q: (Enter your At a price of $18 per CD, a firm sells 40 CDs. If the slope of the demand curve is -…
A: Marginal revenue is the revenue generated from the sale of an additional unit of output. Total…
Q: Find an individual firm’s supply curve. How many firms are there currently in the market?
A:
Q: A juice producing company operates in a perfectly competitive market and is therefore a price taker.…
A: A perfectly competitive firm is a price taker and can sell any quantity of the commodity at the…
Q: Assume a competitive industry is initially at its long-run equilibrium, given the inverse market…
A: The given question has not been written properly.
Q: The data in the table to the right give the total cost, C, and marginal cost, MC, for a profit…
A: In perfect competition, There exists a large number of buyers and sellers. The firm will produce…
Q: Suppose that the additional revenue that comes from the 100th unit is $5, and the marginal cost of…
A: Introduction:This question imagines a bustling marketplace where firms compete to produce and sell…
Q: Consider a manufacturer making leather cases with a market demand function (weekly) given by…
A: Profit refers to the difference between total revenue and total costs when producing and selling a…
Q: Assume a competitive firm faces a market price of $80, a cost curve of: C = 0.004g + 50g + 1000, and…
A: Answer - Given in the question- C = 0.004q2 + 50q +1000 MC = 0.012q2 + 50 Price = $80 At profit…
Q: A firm in a competitive industry has the following short-run cost function: c(y) = y3/3 - 20y2…
A: Cost : TC= y3/3-20y2+310y Average Cost : AC=TC/y AC=y2/3-20y+310 Optimal output for a single firm…
Q: Each firm in a competitive market has a cost function of: C = 49 + g?. so its marginal cost function…
A: Answers In the long run AC = MC = P. Hence we have P = 49/q + q = 2q which gives q = 7 units and…
Q: What is the profit maximizing level of output for the firm? How much profit is this firm earning?…
A: Profit maximizing level of output is achieved where price and quantity are equal i.e., in…
Q: C1: PERFECT COMPETITION Suppose we have many firms each with an individual supply curve of q³= ½P).…
A: Perfect competition is a market form where there are a large number of buyers and sellers who sell a…
Q: a quasi-fixed cost of $5000 (that is COST = 0 if they exit but COSTS = 5000 + variable costs if they…
A: Given, Supply curve, qs = 12p Quasi fixed cost = $5000 Demand curve,…
Q: disregard the portion of the supply curve that corresponds to prices where there is no output since…
A: Demand, or the desire for a commodity, is defined as a person's willingness to buy a specific…
Q: Assume a competitive firm faces a market price of $100, a cost curve of: C= 1.00g + 25g + 1,600 and…
A: Given:- Price=$100 C=1.00q2+25q+1600 To calculate:- Production to maximize per unit profit=?…
Q: Graph the AT C, AV C, MC, and MR curves in a single graph, and indicate the profit maximizing level…
A:
Q: Suppose the cost function for a firm is given by C(Q) = 100 + Q2. If the firm sells output in a…
A: A perfectly competitive firm is a price taker, which means it takes the price determined by market…
Q: Which of the following are true about the profit-maximizing rule of MR = MC? (check all that apply)…
A: The market structure can be divided into four based on the degree of competition and the type of…
Q: When market conditions in a competitive industry are such that firms cannot cover their total…
A: Competitive industry market is the market structure where buyers and sellers of that product are in…
Q: Suppose the market for corn is a purely competitive, constant-cost industry that is in long-run…
A: In perfect competition, The firms are price taker not price maker. And the price is determined on…
Q: It is possible to lower the average cost of production by expanding output beyond Q0 to Q1. Why…
A: In a Monopolistically competitive market, There exists a large number of buyers and sellers selling…
Q: A firm in a competitive market has a short run cost curve given by C = Q' - 100 + 100Q + 100. (a) If…
A: ANSWER A perfectly competitive firm's short vun shut-down point is when p equals AVCmin If P…
Q: There are 80 firms of type A and 60 firms of type B in a perfectly competitive market. On one hand,…
A: In perfect competition, There exists a large number of buyers and sellers. The firm will produce…
Q: The graph below shows a particular firms marginal revenue (mr) marginal cost (mc) and average total…
A: A competitive market is an expression in economics that implies a marketplace where there are a…
Q: Exercise 2.9 Firms in a competitive industry have production costs C(q)=q²+20q+100 and the industry…
A: Production cost in economics refers to the total expenses incurred by a firm in producing a…
Step by step
Solved in 5 steps
- Start from a market with perfect competition. For a representative producer, the long-term marginal cost is given by LMC=9Q2−20Q+50LMC=9Q2−20Q+50 and the long-term total cost function is LTC=3Q3−10Q2+50QLTC=3Q3−10Q2+50Q Assume that the price on the market right now is SEK 50. a) How much profit or loss does the producer make in the initial situation? b) Describe in detail what will happen in the market and why c) What will the equilibrium price be? d) how much will our producer produce at market equilibrium?a) Find the long run equilibrium price. Find the minimum efficient scale of the typical firm. Find the typical firm’s average cost when it operates at minimum efficient scale. In the long run, what price will prevail in this market? In words, clearly justify your answer. Suppose demand is QD = 3,200 – 100P. (b) Explain why you expect the number of firms in this market to be fifty-five. In this market, what is the short run supply function of the typical firm? What is the short run market supply function? Suppose the local government introduced a $90 licensing fee that raised the fixed cost from $160 to $250. c) Would the introduction of the licensing fee affect the short run equilibrium price or quantity? Justify your answer? Clearly explain why you expect that in the long run fewer larger firms will operate in this market. After the introduction of the licensing fee, what is the new long run equilibrium price? How many firms will survive in this market?A competitive firm's cost of producing q units of output is TC=18+4q+q^2 Its corresponding marginal cost is MC=4+2q The firm faces a market price p = $24. Create a spreadsheet with q = 0, 1, 2, …, 15, where the columns are q, TR, TC, TVC, AVC, MC, and profit. Determine the profit-maximizing output for the firm and the corresponding profit. Should the firm produce this level of output or should it shut down? Explain briefly. Suppose the competitive price declines to p = $12. Repeat the calculations of part a. Should the firm shut down?
- Question 3 Suppose a market demand function is given by QD(P) = 1,000 - 10P. The product can be produced with a cost function C(Q) = 10,000 + 20Q. (a) Determine Q and P and the firm's profit if there is a single firm. (b) Determine total output Q, the equilibrium price, and the profit of each firm if there are two firms (i.e., a Cournot oligopoly). (c) Determine Q. the equilibrium price, and the profit of each firm if there are 10 firms.Suppose a typical (representative) corn farm has a short run production technology which results in the outcome of U-shaped Average Variable Cost (AVC), Average Total Cost (ATC), and Marginal Cost (MC). Further, suppose this firm sells its product in a market where the price of the good is determined by the interaction of market Demand and Supply. Because an individual firm is very small compared to the rest of the market, we treat the market price as the price given to the firm, and the individual firm cannot impact that price. assume we are in the Short Run for this firm. In graphing, put $ on the vertical axis and lower-case q (firm output) on the horizontal axis. Start with the AFC0, AVC0, ATC0, and MC0 curves . show shifts in any of the cost curves, reflecting the higher cost of land (keeping in mind that this higher cost is independent of how much or how little corn is actually produced) and labeling the changed cost curves with a subscript 1. On the graph with $ on the…Consider a competitive industry with a market demand curve of P = 121 – Q, where P is market price and Q is the quantity demanded in the market. In the short run there are 4 firms in the industry, and each firm has a total cost function of TC = 25 + 6q + q2, where q is output of the individual firm. In the long-run market equilibrium what is the number of firms in the industry? Group of answer choices 26 15 5 110 21
- 4. A vertically integrated automobile company has an upstream engine division and a downstream assembly division. The demand for the company's cars is given by Q = 20-P. Each car requires one engine. The downstream division's total cost of assembling cars is TCD(Q) = 4Q. The upstream division's total cost of producing engines is TCv (Q) = Q². (a) Suppose that there is no outside market for engines. What is the price and quantity of cars produced by the company? (b) Suppose that there is no outside market for engines. What should be the transfer price for engines? [Hint: the transfer price of an engine should equal the marginal cost of engine production at the optimal quantity.] (c) Suppose that there is a competitive outside market in which the price of an engine is 12. What is the price and quantity of cars produced by the company? (d) Suppose that there is a competitive outside market in which the price of an engine is 12. What is the quantity of engines that the company buys or…Q4) Answer the following, providing a graphical illustration along with your answer where necessary: a) What is the profit maximising condition? b) Explain what is meant by abnormal profit? What is the adjustment process from short-run abnormal profit to long-run equilibrium in a perfectly competitive market? c) Please find below Pricing options for firm A and B, along with individual payoffs (Firm A's payoff/Firm B's payoff) Firm A Price £2 Price £1 Assume you are the pricing manager at Firm A; i) ii) Price £2 £10,000/£10,000 £12,000/£5,000 Firm B Price £1 £5,000/£12,000 £6,000/£6,000 What is your payoff for a 'maximin' strategy? What is your payoff for a 'maximax' strategy? Does a dominant strategy exist within this prisoners' dilemma?Assume that the MBA education industry is constant-cost and is in long-run equilibrium. Discuss what long-run equilibrium means. Market demand increases, but due to strict accreditation standards, new firms are not permitted to enter the market. Explain the nature of the original long-run equilibrium then analyze the determination of a new long-run equilibrium, showing the effects with the aid of graphs for a representative school as well as for the market as a whole. Explain with a compare/contrast analysis how your analysis changes if MBA’s are produced in an increasing cost industry. Page limit, one page and one page for supporting graphs.
- Perfectly Competitive market vs duopoly market Suppose the daily demand function of pizza in St Catherines Q^d=2175-5p. For 1 pizza store, the variable cost of making Qpizza per day is C(q)=0.2q^2 – 5q there is a 2000$ fixed cost. There is free entry in the long run a) What is the long run market equilibrium price and quantity in this market? How many firms in the market b) If the marginal cost decreased by 2$ per pizza what is the new short run market equilibrium price and quantity.c) Draw graphs to show the short run and the long run responses of both an individual firm and the market in part b. Now assume the market demand function does not change, consider duopoly market in which the marginal cost of each firm is 35. d) What is the nash equilibrium price and quantity in this Stackelberg model.Suppose that demand for a particular style of handmade Rwandan baskets is Qd = 1700 – 10P. Each basket maker has the following cost function: TCi = 1000 + 50 qi + .1 qi^2. Given this information, find the market outcomes under the various market structures below Perfect competition, long-run. Given the same cost functions above, find the long-run equilibrium quantity per firm, the LR market price, market quantity and equilibrium number of firms. What is the profit or loss per firm? What is MCi and ATCi?For each lettered space in the following table, determine the appropriate dollar amount (See the chart attached) Assume that the above cost data is for a perfectly competitive firm. Using this data answer the following: (a) If the market equilibrium price that this firm charges is $50, what level of output must this firm produce to maximize its profit? (b) What would be the amount of profit that this firm would earn if it produced at the profit-maximizing level of output? 3. You read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following? a. The prices of agricultural products b. The profits of farmers c. The equilibrium output in agricultural markets d. The number of farms 4. Distinguish between economies of scale and diseconomies of scale. Give examples of why a…