In principle, how do we determine a perfectly competitive firm's profit-maximizing output and maximum profits given information about the market clearing price, and about the marginal cost and average total cost curves of the firm? Explain in words.
Q: Suppose that each firm in a competitive industry has the following costs: TC = 50+ q? Total Cost:…
A: Hi, thank you for the question. As per our Honor Code, we can attempt only the first three subparts…
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A: PLEASE FIND THE ANSWER BELOW.
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A: 1)MR=MC at a market price of $$200 and 260TR=Price×QuantityTR=200×260TR=$52,000
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Q: d. Now assume the market price is $5.50 per pair, and Buddies produces the profit-maximizing…
A: The answer to the question is as follows :
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Q: Can you help with parts d,e and f please? A perfectly competitive firm has the following total cost…
A: TC = 4,500 + 2q + .0005q2 We know that ATC = TC / q ATC = (4,500 + 2q + .0005q2) / q TC = 4,500 +…
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Q: Assume that a firm in a competitive market faces the following cost information. If the market price…
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Q: Suppose the market for peaches is perfectly competitive. The short-run average total cost and…
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Q: The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a…
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A:
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- 17.A perfectly competitive firm has the following total cost function: TC = 4,500 + 2q + .0005q2 where TC is total cost in dollars and q is the quantity of output produced. a. Assume this perfectly competitive market consists of 800 firms with cost structures identical to the one above. What is the equation for the market supply curve? Assume the market demand curve is: Qd = 5,600,000 – 400,000P where Qd is the quantity demanded in the market and P is the commodity’s price in dollars. b. What is the market’s equilibrium price? c. Assuming the market is in equilibrium, using marginal revenue and marginal cost determine the firm’s profit-maximizing quantity of output? What does the profit-maximizing firm’s total economic profit equal? Assume the total cost function above: TC = 4,500 + 2q + .0005q2 is associated with the short-run total cost function that corresponds to the minimum point on the long-run average total cost curve and this is a constant cost industry. d. What would the…Why can't a perfectly competitive firm charge a price premium (sell at a higher price) relative to other firms in the industry (what would happen if a firm attempted to do so)? What is the term given to perfectly competitive firms since they must sell at the market equilibrium price?The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a purely competitive firm that produces novelty ear buds. Assume the market for novelty ear buds is a competitive market and that the price of ear buds is $6.00 per pair. Buddies Production Costs Quantity MC ATC of Ear Buds ($) ($) 25 2.20 30 2.02 2.17 35 2.45 2.21 40 3.57 2.38 45 4.00 2.56 50 5.46 2.85 55 5.93 3.13 60 8.53 3.58 Instructions: In part a, enter your answer as the closest given whole number. In parts b-d, round your answers to two decimal places. a. If Buddies wants to maximize profits, how many pairs of ear buds should it produce each week? pairs b. At the profit-maximizing quantity, what is the total cost of producing ear buds?
- The equations below correspond with questions #1 - 2 below and describe the costs of a profit maximizing, perfectly competitive firm (q = output): Total Costs TC = 300 if q = 0 Total Costs TC = 400 + 10q + 2q2 if q > 0 Marginal Cost MC = 10 + 4q if q> 0 What is the greatest possible profit that this firm would earn if the market price is set at $90? a. $1800 b. $100 c. $400 d. $1400 e. none of the aboveIf the price was given what is the formula equation to figure the "profit-maximizing quantity of output" for a perfectly competitive firm?A firm sells its product in a perfectly competitive market. Its total cost function is: TC = 900 - 20Q + Q2where TC is total cost and Q is output level.a. Find the firm’s average total cost function. b. Find the firm’s average variable cost function. c. Find the firm’s marginal cost function. d. Given the price is $100, what is the profit-maximizing output level? e. Given the price is $100, what is the profit level? f. Over time, is there going to be entry or exit in this competitive market? Why?
- The Invisible Hand Principle states that individuals' independent efforts to maximize their gains will generally be beneficial for society and result in the socially optimal allocation of resources (Need help? Read chapter 4.6 of the textbook, here: https://playconomics.com/textbooks/view/playconomics4-2019t3/part2/ch4/s6) in any type of market. particularly in the short run. if the market is perfectly competitive. if firms are free to enter but not to exit the market. None of these.Consider the perfectly competitive market for copper. Assume that, regardless of how many firms are in the Industry, every firm in the industry is Identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. COSTS (Dollars per pound) PRICE (Dollars per por 100 90 80 70 60 50 40 30 20 100 10 50 0 80 70 60 50 40 30 20 10 0 The following diagram shows the market demand for copper. 0 Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (Hint: You can disregard the portion of the supply curve that corresponds to prices where there is no output since this is the Industry supply curve.) Next, use the purple points (diamond symbol) to plat the short-run industry supply curve when there are 30 firms. Finally, use the green points (triangle symbol) to plot the short-run Industry supply curve when there are 40 firms. MC D 0 5 10 ATC H AVC D 0 15…Consider the following cost curves faced by each firm: TC = 60 +0.5q and MC = q, where q is the individual output for each firm in a perfectly competitive market. Assume the market demand is described by theequation: Q = 100 - 2P where Q is the market output in 100s of units. Currently, the market price is $10. What would one expect to happen in this market in the long run? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. Forko In the long run, firms will either enter or exit the market. a b. In the long run, firms will enter the market. In the long run, firms will exit the market. In the long run, firms will neither enter nor exit the market.
- Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + 0.5Q^2The market demand curve for this product is: Qd= 120 −PThere are 9 firms in the market.a) What are each firm’s: fixed cost, variable cost, marginal cost, and average total cost? Graph the average-total-cost curve and the marginal-cost curve.b) Give the equation for each firm’s supply curve.the average-total-cost curve at its minimum? What is marginal cost and average totalc) Give the equation for the market supply curve for the short run in which the numbercost at that quantity?Refer to the accompanying figure. If the market for doughnuts is perfectly competitive, then assuming this firm can earn enough revenue to cover its variable cost, it should produce: Price (S/doughnut) 0.35 p 0.30 0.25 0.20 0.15 0.10 0.05 0 0 10 20 30 40 50 60 Marginal Cost 70 80 90 Quantity (doughnuts/day) Average Total Cost 50 doughnuts per day. the quantity of doughnuts at which average total cost is minimized. the quantity of doughnuts at which average total cost equals the market price. the quantity of doughnuts at which marginal cost equals the market price.Suppose that the market for air fresheners is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this market. 40 36 Profit or Loss 32 28 24 ATC 16 12 AVC MC + 0 2 4 8 10 12 14 16 18 QUANTITY (Thousands of air fresheners) In the short run, at a market price of $20 per air freshener, this firm will choose to produce air fresheners per day. 20 20 8. PRICE (Dollars per air freshener)