If a single firm with demand Q=100-2P (Q=quantity, P=Price), reduces its constant marginal costs from £8 to £4 then Consumer Surplus (CS) and Producer Surplus (PS) after the reduction in marginal costs will be... a. CS=1058 PS=529 b. CS=2116 PS=1058 c. CS=1000 PS=500 d. CS=500 PS=1000 e. CS=529 PS=1058
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If a single firm with
CS=1058 PS=529
CS=2116 PS=1058
CS=1000 PS=500
CS=500 PS=1000
CS=529 PS=1058
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- If a single firm with demand Q = 100 - 2P (Q= quantity, P = Price), reduces its constant marginal costs from £8 to £4 then Consumer Surplus (CS) and Producer Surplus (PS) after the reduction in marginal costs will be... Question 12 Answer a CS = 1058 PS = 529 b. CS = 2116 PS = 1058 c. CS = 529 PS = 1058 d. CS = 1000 PS = 500 e. CS = 500 PS = 1000Pierce Manufacturing determines that the daily revenue, in dollars, from the sale of x lawn chairs is R(x)=0.005x³ +0.02x² +0.5x Currently, Pierce sells 90 lawn chairs daily a) What is the current daily revenue? b) How much would revenue increase if 95 lawn chairs were sold each day? c) What is the marginal revenue when 90 lawn chairs are sold daily? d) Use the answer from part (c) to estimate R(91), R(92), and R(93) a) The current revenue is $ b) The revenue would increase by $ (Round to the nearest cent.) c) The marginal revenue is $ when 90 lawn chairs are sold daily. d) R(91) $ R(92) $ R(93) $Suppose that each firm in a competitive industry has the following costs: Totalcost:TC=50+1/2q2 Marginalcost:MC=q where q is an individual firm's quantity produced. The market demand curve for this product is Demand:QD=120−P where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market.a. What is each firm's fixed cost? What is its variable cost? Give the equation for average total cost.b. Graph average-total-cost curve and the marginal-cost curve for qfrom 5 to 15. Atwhat quantity is average-total-cost curve at its minimum? What is marginal cost and averagetotal cost at that quantity?c. Give the equation for each firm's supply curve.d. Give the equation for the market supply curve for the short run in which the number of firms is fixed.e. What is the equilibrium price and quantity for this market in the short run?f. In this equilibrium, how much does each firm produce? Calculate each firm's profit or loss. Is there incentive for firms to…
- Suppose that a competitive firm's marginal cost of producing output q (MC) is given by Assume that the market price (P) of the firm's product is $15. What level of output (q) will the firm produce? The firm will produce units of output. (Enter your response rounded to two decimal places.) What is the firm's producer surplus? Producer surplus (PS) is $ (Enter your response rounded to two decimal places.) Suppose that the average variable cost of the firm (AVC) is given by MC(q)=3+2q. AVC(q)=3+1q. Suppose that the firm's fixed costs (FC) are known to be $50. Will the firm be eaming a positive, negative, or zero profit in the short run? In the short run, the firm's profit will be positive Enter your answer in each of the answer boxes.A local microbrewery has total costs of production given by the equation TC=500+10q+5q^2. This implies that the firm's marginal cost is given by the equation MC=10+10q (you do not need to be able to show this). The market demand for beer is given by the equation QD=105 – (1/2)*P. a) Write the equations showing the brewery's average total cost .A company is the sole producer of holographic TVs. The daily demand for these TVs is Q=10,200 - 100P, where Q is the quantity demanded and P is the price. The cost of producing the TVs is (note that this implies that marginal cost is equal to Q, MC = Q). What is the company’s total revenue schedule? What is the company’s marginal revenue schedule? What is the profit maximising number of TVs that the company must produce each day? What price should it charge per TV? What is the daily profit?
- 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…Suppose that each firm in a competitive pizza market has the following identical cost: Total cost: TC=25+1.5Q2 The market demand function for the pizza market in the above question 2(a) is: Q= 120-P, where P is the price and Q is the total quantity of the pizza. Currently, there are 12 firms in the market. i. Formulate the equation or level of fixed cost, variable cost, marginal cost, average variable cost (AVC) and average total cost (ATC) for each firm. ii. Formulate each firm’s supply function based on the cost information prior to innovation and determine the market supply function in the short run. The total number of firms in the market is assumed to be fixed. iii. Calculate the price and quantity of pizza in the market and the quantity produced by each firm while the market is at the short-run equilibrium. Use a diagram to illustrate this short-run equilibrium and calculate each firm’s profit or loss. Discuss whether each firm has an incentive to leave or stay in the market.…Assume a competitive firm faces a market price of $100, a cost curve of: C = 0.25q + 50q + 1,600 and a marginal cost curve of: MC = 0.50g + 50. The firm's profit maximizing output level is 100.00 units, the profit per unit is $9.00, and total profit is: $900.00. However, if the firm wanted to maximize the profit per unit, how much would it produce? It would produce units. (round your answer to two decimal places) If the firm produced this output level, what would be the profit? Its profit would be S. (round your answer to the nearest penny)
- The figure depicts the demand curve of a firm producing cars, together with its marginal cost, average cost, and isoprofit curves. Based on the figure, which of the following statements is correct? Price, MC ($) 8,000 5,400 4,100 2,820 100 0 0 34 50 Quantity of cars, Q MC Isoprofit AC 100 O The consumer surplus in the profit-maximizing outcome is $105,300. The producer surplus in the Pareto efficient outcome is $133,960. O The deadweight loss in the profit-maximizing outcome is $20,640. O The firm's profit in the Pareto efficient outcome is $100,000.Suppose that each firm in a competitive industry has the following costs: Total Cost: TC=50+12q2TC=50+12q2 Marginal Cost: MC=qMC=q where qq is an individual firm's quantity produced. The market demand curve for this product is: Demand QD=140−2PQD=140−2P where PP is the price and QQ is the total quantity of the good. Each firm's fixed cost is . What is each firm's variable cost? 50+12q50+12q 12q12q qq 12q212q2 Which of the following represents the equation for each firm's average total cost? 50q+12q50q+12q 50q50q 50+12q50+12q 12q12q Complete the following table by computing the marginal cost and average total cost for qq from 5 to 15. q Marginal Cost Average Total Cost (Units) (Dollars) (Dollars) 5 12.50 6 11.33 7 10.64 8 10.25 9 10.06 10 10.00 11 10.05 12 10.17 13 10.35 14 10.57…Consider the competitive market for ruthenium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. COSTS (Dollars per pound), go 72 64 56 48 40 32 24 ATC 16 AVC MC- ☐ 0 4 8 12 16 20 24 28 32 36 40 QUANTITY (Thousands of pounds) The following graph plots the market demand curve for ruthenium.
