erfectly competitive market, each firm has the cost function: q 2+10q+100. The price in the market is $50. at is the Marginal Cost for the firm? at is the Profit Maximizing Output? at is the Total Profit the firm receives? uld this firm continue to produce in the short run? Please explain. e price is $20, should the firm continue to produce? Please explain.
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- In a perfectly competitive market, each firm has the cost function: q 2+10q+100. The price in the market is $50. a. What is the Marginal Cost for the firm? b. What is the Profit Maximizing Output? c. What is the Total Profit the firm receives? d. Should this firm continue to produce in the short run? Please explain. e. If the price is $20, should the firm continue to produce? Please explain.Assume that a firm in a competitive market faces the following cost information. If the market price for this firm's product is $40, calculate the profit maximizing level of output for this firm using marginal analysis. a.Approximately where do you think the price will end up in this market over the long run? b.Last, instead of assuming a given price, how would you go about finding the equilibrium price if you were given information on market demand?Suppose the competitive market price is $60, and a competitive firm’s total costs = q^2 - 6q + 990 and marginal cost = 2q - 6. a. Solve for the profit-maximizing (or loss minimizing) quantity (q*). b. What is the market equilibrium price? c. Should the competitive firm produce q*? Explain why using one of the four key questions and solutions. d. Does the competitive firm make a profit? Explain why using one of the four key questions and solutions. e. How much profit (or loss) does the competitive firm make?
- A profit-maximizing firm incurs an economic loss of $30,000 per year. Its fixed cost is $25,000 a year. Should the firm produce or shut down in the short run?b. Suppose instead that the firm has a fixed cost of $35,000 per year. Should the firm produce or shut down in the short run?The graph below shows cost curves for a typical firm operating in a perfectly competitive market. Curve 1 represents Marginal Cost (MC), Curve 2 represents Average Variable Costs (AVC) and Curve 3 represents Average Total Costs (ATC). Suppose that the equilibrium price is $12. What will happen in this market in the long run? a. No new entry/no exit. b.Existing firms will exit. c.New firms will enter.A competitive firm is maximizing its profit by selling 150 units of output. The firm’s marginal cost is $8 and its average total cost is $6. The firm’s profit amounts to what?
- A firm produces a product in a perfectly competitive industry and has a total cost function TC= 50+4q+2q². a. At the short-run market price of $20, the firm is producing 5 units of output. Is the firm maximizing its profit? Explain. b. What quantity of output will the firm produce in the long run, assuming there is no change in cost structure? What will be the long-run equilibrium price? c. Graphically depict the long-run equilibrium for an individual firm within this market.The hardware industry is perfectly competitive. Currently the price of a hammer is $5 and there is a balance between the number of hammers purchased and the number of hammers manufactured. However, the minimum average total cost of hammers is $7.50. Which of these scenarios is most likely ? Select one: A. Firms will enter the industry and the price will fall to $4 B. Firms will enter the industry and the price will stay at $5 C. Firms will leave the industry but the price will stay at $5 D. Firms will leave the industry and the price will rise to $7.50Suppose Robin's Clock Works produces in a perfectly competitive market. Suppose the average total cost of clocks is $95, the average variable cost of clocks is $90, and the price of clocks is $85. If the firm is producing the level of output where marginal cost equals price, then in the short run the firm: A) can increase profit by increasing output.B) is earning a positive economic profit.C) should continue to produce since total revenue exceeds total variable cost.D) should shut down.
- A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue of $10, average total cost of $8, and fixed cost of $200. What is its profit? What is its marginal cost? What is its average variable cost?Will a profit-maximizing firm in a competitive market ever produce a positive level of output in the range where the marginal cost is falling? Give an explanation.Does a competitive firm’s price equal its marginal cost in the short run?