Consider a competitive market for red lentils with 100 identical farmers in Horsham Victoria, a competitive market price of $5 and the following MC for each farmer: MC = = $0.05Q Also consider the following market demand function: QD = 1000-40P a) Calculate the optimal level of production (in tonnes) for each farmer (show workings) b) Assuming 100 lentil farmers of equal size how many tonnes of lentils in total will be supplied in the entire market? (show all workings) c) Consider that the government now imposes a 25% tax on producers, calculate i) the new equilibrium level of output for each firm (hint - think about how this affects each farmer's marginal cost), and ii) new total supply in the entire market (show all workings)
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- Consider a competitive market for red lentils with 100 identical farmers in Horsham Victoria, a competitive market price of $5 and the following MC for each farmer: MC = $0.05Q Also consider the following market demand function: QD a) Calculate the optimal level of production (in tonnes) for each farmer (show workings) = = 1000 - 40P b) Assuming 100 lentil farmers of equal size how many tonnes of lentils in total will be supplied in the entire market? (show all workings) c) Consider that the government now imposes a 25% tax on producers, calculate i) the new equilibrium level of output for each firm (hint - think about how this affects each farmer's marginal cost), and ii) new total supply in the entire market (show all workings)Green et al. (2005) estmate the supply and demand curves for Californa processod tomatoes. The supply function is: \[ \ln \left(Q_{s}\right)=0.200+0.550 \ln (p) \] whereQis the quantify of processing tomatoes in milions of tons per year andpis the price in dollars per ton. The demand function is: \[ \ln \left(Q_{d}\right)=2600-0.200 \ln (p)+0.150 \ln \left(p_{1}\right) . \] wherep1is the price of tornato paste (which is what processing tomatoes are used to produce) in dollars per ton. Supposept=$119Determine how the equilerium price and quantity of processing tomatees change if the price of tomato pasise tails by16%. If the price of tomato paste fals by18%, then the equaborium price will by 5 (Enter a numene response using a real number rounded to two decimal places)Given the input-output matrix below, find the output matrix if final demand changes to 500 for water, 180 for electric power, and 800 for agriculture. Industry Electric Power Industry: Water Electric Power Agriculture Other Water 200 100 300 400 The output matrix is X= (Round to two decimal places as needed.) 480 120 240 360 Agriculture Final Demand 180 240 120 60 290 140 600
- Market Equilibrium A retail chain will buy 900 cordless phones if the price is $10 each and 400 if theprice is $60. A wholesaler will supply 700 phonesat $30 each and 1400 at $50 each. Assuming that thesupply and demand functions are linear, find the market equilibrium point and explain what it means.A local company is planning to manufacture and market a four-slice toaster. For this toaster, the research department’s estimates are aweekly demand of 300 toasters at a price of $25 per toaster and a weekly demand of 400 toasters at a price of $20. The financial department’s estimates are fixed weekly costs of$5,000 and variable costs of $5 per toaster. a) Assume that the relationship between price ? and demand ? is linear. Use the research department’s estimates to express ? as a function of ? and determine the domain of the function. b) Using your knowledge from Finite Math, determine the Revenue function in terms of ?. c) Determine the Marginal Revenue at 2 different production levels for example 250 and 500 units. Interpret these results. (HINT: Consider what a positive or negative first derivative implies) d) Assume that the cost function is linear. Use the financial department’s estimates to express the cost function interms of ?. e) Determinethe Marginal costand interpret the…Q2)Tony Keonte owns a factory that manufactures Eye-Games. His weekly profit (in thousands of dollars) is given by the following function: P(x) = -4x2 + 80x- 300. Where x is the number of Eye-Games sold. a) What is the largest number of Eye-Games that the company can sell and still make profit? (25 points) b) How many Eye-Games will the firm have to produce and sell in order to maximize profit? (25 points)
- Suppose that a demand equation is given by q=1750-25p and the cost of producing q units is given by C(q) = 63,000-70q+0.02q2. Find the marginal profit for the following production levels. (a) 700 units (b) 1055 units (c) 1600 units (a) The marginal profit for a production level of 700 units is (Simplify your answer.)K Given the input-output matrix below, find the output matrix if final demand changes to 400 for water, 180 for electric power, and 700 for agriculture. Industry: Water Electric Power Agriculture Other Water 120 120 240 720 The output matrix is X = (Round to two decimal places as needed.) Industry Electric Power 400 200 100 300 8 Agriculture Final Demand 180 240 120 60 260 170 500(c) The demand function of the company that make hard disk is given by P = D(Q) = 78 – 4Q where P is the unit price in ringgit and Q is the quantity demanded in units of a thousand. The supply function for these hard disks is given by P = S(Q) = 13 + Q where P stands for the unit price in ringgit Q stands for the number of hard disk that the supplier will put on the market, in units of a thousand. Determine the consumers' surplus and the producers' surplus if the market price of a hard disk is set at the equilibrium price.
- Suppose that the market for dress shirts is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. (?) 50 45 40 35 30 ATC 25 20 15 AVC 10 MC 5 + 2 4 6. 8 10 12 14 16 18 20 QUANTITY (Thousands of shirts) For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down, it will produce. (Hint: You can select the purple points [diamond symbols] on the graph to see precise information on average variable cost.) Price Quantity Total Revenue Fixed Cost Variable Cost Profit (Dollars per shirt) (Shirts) (Dollars) (Dollars) (Dollars) (Dollars) 12.50 7,500 135,000 27.50 135,000 45.00 135,000 If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's fixed cost is…Marginal cost is given by the function :- 2Q2 - 130 And the equilibrium quantity is 10 so calculate the marginal cost.Road Runner Co is a Pakistani manufacturer making Bicycles. It exports to two markets,Bangladesh and Sri Lanka. Demand for Bicycles in thesetwo markets is given by the following Functions: Bangladesh Q1 = 12 – P1 Sri Lanka Q2 = 8 – P2 Where Q1 and Q2 are respective quantities sold (in thousands) andP1 and P2 are the respective prices (in Pak. Rupees per unit) in the two markets. Total cost function is C = 5 + 2 (Q1+ Q2) b. consider two cases: (i) Company is effectively able to price discriminate in thetwo markets. What will be the total profits? (ii) Suppose the company does not engage in price discrimination. By charging thesameprice in the two markets what are the profit maximizing levels of price,output, and the total profits? c. Analyze, with graphs, the two alternative pricing strategies available to the company.