An industry face the demand curve Q=400-4P, where each firm produces an indentical good at a constant marginal cost of $10. The Bertrand equilibrium market quantity is
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- Assuming a fully competitive electricity market where the cost function of all suppliers is given by c(q)=3q2+2q+2 and the demand is defined by p(q)%=22-2q. 8.1. Please compute the marginal costs of the supplier 8.2. Please compute the price and the quantity produced in the market equilibriumSuppose Tyco International has complete control over the plastic hangar market. Suppose the inverse demand for hangars is given by: P(Q) = 3 – Q/16000. Suppose that the total cost is given by: TC(Q) = 100 + Q What is the equilibrium price and quantity of hangars in the market if the market is competitive?If the market demand curve is Q = 100−p, what is the market price elasticity of demand? If the supply curve of individual firms is q = p and there are 50 identical firms, draw the residual demand facing any one firm. What is the residual demand elasticity facing one firm at the competitive equilibrium.
- Demand for microprocessors is given by P = 35 – 5Q , where Q is the quantity of microchips (in millions). The typical firm’s total cost of producing a chip is Ci = 5qi, where qi is the output of firm i. a) Under perfect competition, find total industry profit and consumer surplus.Suppose a perfectly competitive market has firms with total cost given by c(y) = 3y2+ 10. a) What is the individual firm’s profit-maximizing output? b) If there are m firms, what is the industry supply function? c) Let the industry demand be X(p) =a−bp, where a and b are positive constants. Find theequilibrium price in the market. What is the equilibrium quantity sold?consider a market with a large number of firms, an upward sloping supply curve S0, and a downward sloping demand curve D0. We will start with the assumption that the market is perfectly competitive; hence, the supply curve S0 is the sum of the marginal cost curves of all the firms. Assume the market is perfectly competitive. Indicate the original competitive equilibrium price P0, equilibrium quantity Q0, the resulting Consumer Surplus CS0, the resulting Producer Surplus PS0, and the “socially optimal” output (the output the Benevolent Dictator would choose) QSO on your graph. Graphically indicate the size of Dead-Weight Loss DWL0 if there is such a loss. Question - Now suppose that scientists discover that this particular product has a significant Positive Externality. The Demand curve is a depiction of marginal private benefit (MPB). However, the existence of the positive externality means that for every given output level, Marginal Social Benefit (MSB) is higher than Marginal…
- Suppose that all firms in a constant-cost industry have the following long-run cost curve:c(q) = 4q2 + 100q + 100The demand in this market is given by QD = 1280 - 2p. Suppose the number of firms in the market is restricted to 80a. Derive the supply curve with this restriction. Find the market equilibrium price and quantity with the restriction.b. If firms are allowed to buy and sell these permits in an open market, what will be the rental price of permits? Will firm’s that own permits make profit? Briefly explain.c. How much deadweight loss is generated by the permit system? Provide a graph showing the region of this deadweight loss.d. Suppose the government abandons the permit system and simply imposes a fixed fee on firms in the market. If the fee is set equal to the permit price you found in c., what will be the equilibrium price, quantity, number of firms and deadweight loss?Consider a local market where there are two local firms, A and B with the following cost functions producing homogenous good: CA=qA² +509A-9B² CB= 2qB² + 70qB+0.25qA² where q4 and qв represent the production levels of firm A and firm B, respectively. The market price of the good produced by two firms is equal to 150. Furthermore, suppose that the two firms act as price-takers (because firms from other locations also serve it). a) Briefly describe the relationship between the two firms (Hint: study the cost structure). b) Find the production levels and the profits of the two firms, assuming that they operate independently. c) Determine the production levels and the profits of the two firms, corresponding to a Pareto- efficient equilibrium in the absence of government intervention. Compare these results with those obtained in the previous point. d) Using the quantities calculated in point c) find the level of taxes and subsidies which would allow to reach the Pareto efficient…In a market, in the long run (free entry/exit), firms share a production function which results in costs following C(q)=0.1q3- 4q2 + 60q , where is the quantity produced by each firm Given a market demand of QD(P)=1,500 - 10P A) What is the equilibrium price? B) What is the market quantity supplied/demanded? C) How many firms will supply in this market, and how many units would each firm supply?
- 497 + 4q3, A firm in the competitive market produces two goods, 1 and 2. The firm face a cost function C(q1, 92) where q1 and q2 are the quantity of good 1 and 2 produced by the firm respectively. The price of good 1 is 8 and the price of good 2 is 4. What is the profit maximizing production quantity for the firm? 1 a. q1 = 1, 92 = b. q1 = 1, q2 = 1 c. 91 = , 92 = 1 d. q1 = 0, q2 = 0a competitive firm can sell any amoun if the firm set a price equal to the market priceA market has many small firms and one dominant firm. The market demand is Q = 100-5P. The dominant firm has a constant marginal cost of $6. All the smaller fringe firms combined have a supply curve given by Qs = 4P-8. The dominant firm sets the market price, and the fringe firms act as price takers. The dominant firm allows the fringe firms to sell as (Enter your responses many units as they want at the price set by the dominant firm. The rest of the market is then supplied by the dominant firm. The profit-maximizing quantity produced by the dominant firm is units and the price it charges is $ as integers.) The fringe firms will produce and sell a total of units at the market price r your response as an integer.)
