For a perfectly competitive firm, suppose that total fixed cost is $576 and averagevariable cost is 12+2q and half of the fixed cost is sunk. Find the individual firm'ssupply function.q=P/4-3 if and only if P>36q=P/6-12 if and only if P>60Oq=P/12-6 if and only if P>36Oq=P/4-3 if and only if P>60

Step 1To determine the individual firm's supply function, we need to consider the firm's marginal…

Answered: For a perfectly competitive firm,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A firm in a perfectly competitive industry has fixed costs of FC = 3 and average variable costs of AVC = 2 + 8q. a) What are the firm’s variable costs (VC)? b) What is the firm’s total cost function? c) If the price is $18, how much does the firm supply? d) Does the firm continue to supply this quantity in the short run? e) Suppose there exists a standard market demand function from consumers (downward sloping). Please provide logical discussion about how the market achieves short-run equilibrium. f) Suppose the market demand was given by Qd(p) = 50 – p. Suppose further that a sales tax of £1 per unit is imposed in the market. Calculate the deadweight loss resulting from this tax. Assume the market consists of 100 firms with identical cost functions.
Good Grains is one of 100 identical firms in the perfectly competitive wheat market. Each firm operates in the short-run with a total cost of: C(Q) = 2Q² + Q + 32. They have a marginal cost of MC 4Q + 1, an average total cost of AC = 2Q +1+ 32 and an | average variable cost of AVC = 2Q + 1. Good Grains will operate at a loss for prices greater than $ but less than $ (Round answers to two decimals if necessary.) Suppose the current market price for a bushel of wheat is P = $9. How many bushels will Good Grains supply? O 2.5 O 2 О 4 О5 When price is high enough generate positive production, the short-run market supply curve for wheat is given by Qlarket (This may be a function of P.)
On a graph for a representative firm in a perfectly competitive industry, depict the three cost curves AVC, ATC, and MC (assume typical U-shaped cost curves). Now assume the market price, P, is such that it intersects the upward-sloping portion of MC above ATC. Graphically depict the short-run equilibrium q (representative firm's output) and π (representative firm's profit) under this price scenario.
Advanced Microeconomics, Production Theory: Perfect Competition
Assume a competitive firm faces a market price of $150, a cost curve of: C + 6q + 1,500, and a marginal cost of: MC = q² + 6. What is the firm's profit maximizing output level? units. (round your answer to two decimal places)
Suppose that a price-taking firm in a perfectly competitive market has the following cost function: C(Q) = A + 0.5Q² where A $100.0 are fixed cost. Also, MC(Q)=Q. All fixed cost are sunk. What is the firm's shut down price? No units, no rounding. Your Answer: Your Answer
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In a perfectly competitive market with constant cost industry and with the market demand Q=1,800-10p, each of the identical firms operating in it has a total cost function TC(q) = 100 + 4q2 . How many firms are there in the market in long run equilibrium?
If the short-run marginal and average variable cost curves for a competitive firm are given by SMC = 2 + 4Q and AVC = 2 + 3Q, how many units of output will it produce at a market price of 34? Instructions: Round your answers to the nearest whole number. Q= At what level of fixed cost will this firm earn zero economic profit? $
If the market price of a product is $10 that lie between the minimum average variable cost $8 (AVC) and minimum average total cost $15 (ATC) of a firm, that firm will:___________ a) always shut down. b) always continue to produce.c) produce in the short run but shut down in the long run. d) produce in the long run but shut down in the short run. e) make positive economic profits.
A perfectly competitive fim has the following total cost function: Total output Total Cost 20 1 30 2 42 3 55 4 69 5 84 100 7 117 How much will the firm produce if the price of the production the market is Rs. 14 per unit? How will it change its output if price rises to Rs. 16 per unit? 6.
Under conditions of perfect or pure competition, or close to those conditions, producers (firms) are what are called “price takers”. This means that the price for the product that they are selling is determined by the market. No matter how little or how much product they supply, they can sell all they want at that price. If they were to price their product higher, they will sell zero. Which of the following is true? The price is equal to marginal revenue but not average revenue The price is equal to marginal revenue and average revenue The price is equal to average revenue but is not equal to marginal revenue The price is above both marginal revenue and average revenue

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