A typical perfectly competitive firm faces market demand and supply given by Q, = 1000 - 20P and Q, = 30P. The firm has MC=Q and ATC = 0.5Q + 40/Q. The firm's total cost is TC = 0.5Q + 40. Complete parts a throughg below ...... a) How much will the firm produce maximize profit? Ounit(s) b) What is the profit loss for the firm in the short run? of $. (Round to the nearest cent as needed.) There will be a c) How many firms are there in the industry?

A typical perfectly competitive firm faces market demand and supply given by Q, = 1000 - 20P and Q, = 30P. The firm has MC=Q and ATC = 0.5Q + 40/Q. The firm's total cost is TC = 0.5Q + 40. Complete parts a throughg below ...... a) How much will the firm produce maximize profit? Ounit(s) b) What is the profit loss for the firm in the short run? of $. (Round to the nearest cent as needed.) There will be a c) How many firms are there in the industry?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

the option for b is loss or profit

A typical perfectly competitive firm faces market demand and supply given by Q = 1000 – 20P and Q = 30P. The firm has MC = Q and ATC = 0.5Q + 40/Q. The firm's total cost is TC = 0.5Q + 40. Complete parts a through g below.
%3D
.....
a) How much will the firm produce to maximize profit?
unit(s)
b) What is the profit or loss for the firm in the short run?
There will be a
of $
(Round to the nearest cent as needed.)
c) How many firms are there in the industry?
d) A firm's ATC is minimized at Q = 8.94. What will the long-run equilibrium price in the market be and how much will each firm produce?
The long-run equilibrium price in the market will be $
(Round to two decimal places as needed.)
and each firm will produce
unit(s).
e) In the SR, what is the price elasticity of the firm's demand? Select the correct choice below and, if necessary, fill in the answer box to complete your choice.
A. The price elasticity of the firm's demand is
(Type an integer or a decimal. Round to two decimal places as needed.)
O B. The price elasticity of the firm's demand approaches infinity.
f) What is the value of the firm's short-run TVC?
TVC = $
(Round to the nearest cent as needed.)
What is the value of the firm's short-run TFC?
TFC = $
(Round to the nearest cent as needed.)

A typical perfectly competitive firm faces market demand and supply given by Qg = 1000 – 20P and Q = 30P. The firm has MC = Q and ATC = 0.5Q + 40/Q. The firm's total cost is TC = 0.5Q + 40. Complete parts a through g below.
%3D
.....
d) A firm's ATC is minimized at Q = 8.94. What will the long-run equilibrium price in the market be and how much will each firm produce?
The long-run equilibrium price in the market will be $
and each firm will produce
unit(s).
(Round to two decimal places as needed.)
e) In the SR, what is the price elasticity of the firm's demand? Select the correct choice below and, if necessary, fill in the answer box to complete your choice.
A.
The price elasticity of the firm's demand is
(Type an integer or a decimal. Round to two decimal places as needed.)
B. The price elasticity of the firm's demand approaches infinity.
f) What is the value of the firm's short-run TVC?
TVC = $
(Round to the nearest cent as needed.)
What is the value of the firm's short-run TFC?
TFC = $
(Round to the nearest cent as needed.)
g) Assume that this is a constant cost industry. What is the equation of the long-run market supply curve? Select the correct choice below and fill
the answer box to complete your choice.
A. Long-run supply will be horizontal at P = $
(Round to the nearest cent as needed.)
B. Long-run supply will be neither horizontal nor vertical and is P =
(Type an expression using Q as the variable. Round to two decimal places as needed.)
C.
Long-run supply will be vertical at Q =
(Round to two decimal places as needed.)

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