Assume that the cost data in the following table are for a purely competitive producer:TotalProductAverageFixed CostAverageVariable CostAverageTotal CostMarginalCost01$ 60$ 45$ 105$ 4523042.572.54032040603541537.552.53051237493561037.547.54078.5738.5747.144587.540.6348.135596.6743.33506510646.552.575 e. Now assume that there are 1,500 identical firms in this competitive industry. That is, there are 1,500 firms, each of which has the costdata shown in the table. Complete the industry supply schedule (column 4 in the table above).f. Suppose the market demand data for the product are as follows:Total QuantityDemandedPrice$ 2717,0003315,0003913,5004412,0005010,500589,500688,000What is the equilibrium price? $What is the equilibrium output for the industry?unitsFor each firm?unitsInstructions: Enter your answers rounded to two decimal places. Enter positive values for profit or loss.What will profit or loss be per unit? (Click to select) per unit = $Per firm? $Will this industry expand or contract in the long run? (Click to select) ✰

Analysis of Competitive Marketse. Industry Supply Timetable:In a completely competitive market, the…

Answered: Assume that the cost data in the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The information in the table shows the total demand for water service in Takoma. Assume that there are two companies operating in Takoma. Each company that provides these services incurs an annual fixed cost of $400 and that the marginal cost of providing the service to each customer is exactly $2.00. Figures listed are for an annual service contract. Quantity 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 Price 60 55 50 45 40 35 30 25 b. Refer to Table 17-36. Suppose these 2 firms are price competing with each other (as what happens in a perfectly competitive market). What would total output be? a. 0 21250 1200
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…
The publisher of a magazine gives his staff the following information: Current price Current sales Current revenue Current total costs $2.00 per issue 150,000 copies per month $300,000 per month $450,000 per month He tells the staff, "Our costs are currently $150,000 more than our revenues each month. I propose to eliminate this problem by raising the price of the magazine to $3.00 per issue. This will result in our revenue being exactly equal to our cost." Refer to the table above, which of the following statements is correct? The publisher's analysis is correct only if the demand is elastic. The publisher's analysis is correct only if the demand is perfectly elastic. The publisher's analysis is correct only if the demand is unit elastic. The publisher's analysis is correct only if the demand is perfectly inelastic.
The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $20, $12, $8, $4, and $2 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $8, $12, $20, $32, and $44 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied. Price Quantity Demanded Quantity Supplied ($ per widget) (widgets) (widgets) $2 $4 $8 $12 $20 $32 $44 In this market, the equilibrium price will be______ per widget, and the equilibrium quantity will be ___ (#) widgets.
The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $26, $14, $10, $5, and $3 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $10, $14, $26, $34, and $42 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied. Price Quantity Demanded Quantity Supplied ($ per widget) (widgets) (widgets) $3 $5 $10 $14 $26 $34 $42 In this market, the equilibrium price will be per widget, and the equilibrium quantity will be widgets.
PS4.2 (a) What Optimal Level of Output (q*) will a Firm Produce given the following? MC(q) = 3 + 2q Price (P) = $9 MC → Marginal Cost q→ Quantity (b) What is a Firm's Producer Surplus assuming the following? Area of Triangle = 1/2* Base * Height (c) Will a Firm be Earning a Positive, Negative, or Zero Profit in the Short-Run given the following? AVC (q) =3+q FC = $3 AVC → Average Variable Cost FC Fixed Cost
Based on Zangwill (1992). Murray Manufacturing runs a day shift and a night shift. Regardless of the number of units produced, the only production cost during a shift is a setup cost. It costs $8000 to run the day shift and $4500 to run the night shift. Demand for the next two days is as follows: day 1, 2000; night 1, 3000; day 2, 2000; night 2, 3000. It costs $1 per unit to hold a unit in inventory for a shift. a. Determine a production schedule that minimizes the sum of setup and inventory costs. All demand must be met on time. (Note: Not all shifts have to be run.) b. After listening to a seminar on the virtues of the Japanese theory of production, Murray has cut the setup cost of its day shift to $1000 per shift and the setup cost of its night shift to $3500 per shift. Now determine a production schedule that minimizes the sum of setup and inventory costs. All demand must be met on time. Show that the decrease in setup costs has actually raised the average inventory level. Is this…
Imagine you are the owner of the Omaha Surfboard Company. You have a branch in Omaha and in Long Beach CA. After some market research you find the following surfboard demand for each market, Omaha Demand: Qo = 1000 – 10P Long Beach Demand: QL = 1000 – 5P Combined/Total Demand: Q = 2000 – 15P Your marginal cost is constant at $40. a. Find your price and quantity if you treated the market as a single entity with a single price. What is your profit? (Hint: find Marginal Revenue and set equal to MC) b. If you treat each market separately, what is P and Quantity in each market, and final profit?
DuopolyMarket for mechanical pencils can be described by the following demand schedule:Price | Number of pencils demanded$6 | 80$5 | 200$4 | 320$3 | 440$2 | 560$1 | 680$0 | 800The fixed cost is $340, while the variable cost is $0.50.d) If there were two firms on the market and they agreed to cooperate, how much would eachfirm need to produce? Follow the procedure outlined in the lecture and show that the otherfirm would prefer to deviate from the agreement.e) When the firms deviate from the agreement, there is a new optimal level of output. Showwhether the firms have an incentive to deviate from that level?f) If there were two firms on the market, what would be the price and the quantity of pencilstraded if the firms couldn’t cooperate?
Reid has determined that the daily demand for doughnuts at his favorite bakery is described by the following equation: Qd = 3,300 - 3000P where Qd is the daily quantity demanded in number of doughnuts and P is the price per doughnuts in dollars. a. What is the point price elasticity of demand at a price of $0.70? b. Assume the price is currently $0.70. What is the marginal revenue obtained by selling one additional doughnut? c. The marginal cost of producing an additional doughnut is $0.10. What price should the bakery establish in order to maximize profits?
2. The demand curve facing a competitive firm The following graph illustrates the market for large moving trucks in Eugene, OR, during Oregon's fall move-in week. PRICE (Dollars per large truck) 400 360 320 Demand 280 240 200 8 160 120 80 40 0 1 3 4 5 6 7 8 QUANTITY (Hundreds of large trucks) 2 Supply + 9 10 (2)
The table shows the demand curve for monster trucks. There are two monster truck producers. For simplicity, assume that the cost of producing a monster truck is zero. (AC=0AC=0, FC=0FC=0) Q demanded Price 11 $18$18 22 $16$16 33 $14$14 44 $12$12 55 $10$10 66 $9$9 77 $7$7 88 $6$6 99 $5$5 Assume the two producers initially collude to maximize profits, splitting production and profits evenly. What price will they charge? $ What is the total quantity produced? monster trucksmonster trucks What are the profits for each firm? $ If one of the producers produces an extra unit to get higher profits, what is the new market price? $ What are the profits for this firm when it breaks the agreement? $ What are the other firm's profits after the agreement is broken?

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