Keep in mind that the formula for a firm's cost function is: TC = FC + C(Q) TC → Total Costs: FC → Fixed Costs: C(Q) → Cost of production*Quantity produced → also known as Variable Costs Q2: Firms A and B are two firms supplying products in two separate differentiated goods markets. Equations (1) and (2) give the total cost functions of the two firms: - Firm A: TC = 2Q --- Equation (1) %3D - Firm B: TC = 10 + 2Q --- Equation (2) %3D Each firm has the ability to produce a maximum quantity of 80,000 units in ten batches of 8,000. The cost of production per unit for each firm is $2. Firm B has a fixed cost of $10. (a) Plot isoprofit curves valuing $34,000 and $60,000 for each of the two firms. Can you provide an explanation for any differences that may exist? (b) Use the information given about firms A and B and appropriate diagrams/figures to explain how the equilibrium for both firms will change if a rival company increases its prices. (c) Use the information given about firm A and appropriate diagrams/figures to explain how the equilibrium will change for firm A if it’s cost of production falls by $1

Keep in mind that the formula for a firm's cost function is: TC = FC + C(Q) TC → Total Costs: FC → Fixed Costs: C(Q) → Cost of production*Quantity produced → also known as Variable Costs Q2: Firms A and B are two firms supplying products in two separate differentiated goods markets. Equations (1) and (2) give the total cost functions of the two firms: - Firm A: TC = 2Q --- Equation (1) %3D - Firm B: TC = 10 + 2Q --- Equation (2) %3D Each firm has the ability to produce a maximum quantity of 80,000 units in ten batches of 8,000. The cost of production per unit for each firm is $2. Firm B has a fixed cost of $10. (a) Plot isoprofit curves valuing $34,000 and $60,000 for each of the two firms. Can you provide an explanation for any differences that may exist? (b) Use the information given about firms A and B and appropriate diagrams/figures to explain how the equilibrium for both firms will change if a rival company increases its prices. (c) Use the information given about firm A and appropriate diagrams/figures to explain how the equilibrium will change for firm A if it’s cost of production falls by $1

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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This question deals with cost curves Keep in mind that the formula for a firm's cost function is: TC= FC + C(Q) TC → Total Costs: FC →Fixed Costs: C(Q) → Cost of production*Quantity produced → also known as Variable Costs Q1: Firms A and B are two firms supplying products in two separate differentiated goods markets. Equations (1) and (2) give the total cost functions of the two firms: - Firm A: TC = 2Q --- Equation (1) - Firm B: TC = 10 + 2Q --- Equation (2) Each firm has the ability to produce a maximum quantity of 80,000 units in ten batches of 8,000. The cost per unit in each firm is $2. Firm B has a fixed cost of $10. (a) Explain the relationship between the zero-profit curve and the marginal cost curve for the two firms using the quantity schedule of the two firms and the relevant plots of equations (1) and (2).
Consider the following problem: Demand: q = 100-p Retailer: marginal cost of selling r = 10 per unit Manufacturer: marginal cost of producing = 40 per unit Neither firm faces any competitor Suppose now that the retailer and the manufacturer are separate firms. Write down the profit function of the manufacturer if it sells to the retailer at w. You solved for the quantity the manufacturer will sell a minute ago, so you can use that in the profit function, and then you will have a profit function for the manufacturer that does not have p, but only has w in it. Solve for the optimal w for the manufacturer to charge and calculate the quantitysold under that w.
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Keep in mind that the formula for a firm's cost function is: TC = FC+ C(Q) TC → Total Costs: FC → Fixed Costs: C(Q) → Cost of production*Quantity produced → also known as Variable Costs Q3: Firms A and B are two firms supplying products in two separate differentiated goods markets. Equations (1) and (2) give the total cost functions of the two firms: - Firm A: TC = 2Q --- Equation (1) - Firm B: TC = 10 + 2Q --- Equation (2) Each firm has the ability to produce a maximum quantity of 80,000 units in ten batches of 8,000. The cost of production per unit for each firm is $2. Firm B has a fixed cost of $10. (a) Use the information given about firm A and appropriate diagrams/figures (hint:think isoprofit curves, demand curves) to explain how the equilibrium will change for firm A if it's cost of production falls by $1 Assume demand curves to be linear
Assume that a competitive firm has the total cost function: TC=1q3−40q2+820q+1900TC=1q3-40q2+820q+1900 Suppose the price of the firm's output (sold in integer units) is $650 per unit. Using tables (but not calculus) to find a solution, what is the total profit at the optimal output level? Please specify your answer as an integer.
Can you show how Qsc is = 2Pc? Which is the answer for this.
An industry has the following cost function: C(X, Y ) = 1500+20X +20Y . Market demands for the 2 goods are given by PX =80−X, and PY =140−2Y Suppose the government wished to use two part tariffs in these markets, and suppose further that two part tariffs are feasible. Imagine that there are 10 consumer in each market. Solve for a set of two part tariffs (one for each martket) that pay the firm zero profits in total, yet achieves efficiency.
Continuing from the previous questions where you are a manager of a firm is the exclusive manufacturer of a unique pair of rainbow shorts with demand and cost functions that are Q=100−2P; C=40+2Q2. Now assume that the firm incurs a one-time cost of $10 for a zoning violation. What is the price that the manager should now charge to maximize profits? (Just give the number, no need to include "$")
Suppose that the market demand curve for your product is given by: Q=$25-0.5P. Assume that the marginal cost and average total cost equal $34 for all levels of production. The marginal revenue curve would be given by the equation: MR= (Carefully enter your response as an algebraic expression, using the proper notation in the proper format.) The adjacent figure shows the demand curve (D) and the marginal revenue curve (MR) for your product. Using the line drawing tool, plot the marginal cost (MC) and the average total cost (ATC) curves. Using the point drawing tool, show the profit-maximizing price and quantity for your firm. Carefully follow the instructions above and only draw the required objects. Economic profit earned by your firm will be equal to $. Price (dollars/unit) $60 $50- $40- $30- $20- $10- $0- 0 MR 12 Quantity (units) 16 D 20
This question deals with cost curves and isoprofit curves. Keep in mind that the formula for a firm's cost function is: TC = FC+ C(O) TC → Total Costs: FC → Fixed Costs: C(Q) → Cost of production*Quantity produced → also known as Variable Costs Q2: Firms A and B are two firms supplying products in two separate differentiated goods markets. Equations (1) and (2) give the total cost functions of the two firms: - Firm A: TC = 2Q --- Equation (1) - Firm B: TC = 10 + 2Q --- Equation (2) Each firm has the ability to produce a maximum quantity of 80,000 units in ten batches of 8,000. The cost of production per unit for each firm is $2. Firm B has a fixed cost of $10. (a) Plot isoprofit curves valuing $34,000 and $60,000 for each of the two firms. Provide an explanation for any differences that may exist (b) Use the information given about firms A and B and appropriate diagrams/figures to explain how the equilibrium for both firms will change if a rival company increases its prices.
Consider the following total cost (TC) curve: 20 $/Q1 15 10. 5 5 MC 10 1 15 TC In the two graphs below, please (carefully) draw the marginal cost (MC) and the average variable cost (AVC) curves corresponding to the TC curve. Please identify the coordinates of the point on each curve at Q=3 (three) and Q = 15 (fifteen). That is, what is MC and AVC at Q=3 and = 15? Still, in other words, identify the coordinates of two points on each of the two curves. Output AVC
The FIA Formula 1 World Championship to be held during the 2021 Mexico City Grand Prix has a total cost function equal to CT = Q33 + Q2 + 125Q and an inverse demand function of P = 200−2Q. Now suppose there is a new company managing this event, so the total cost function becomes CT = 4Q. This new company intends to sell at two different prices depending on the place that the spectators occupy at the Hermanos Rodríguez Autodrome. For the Red Zone Boxes. The estimated demand will be q1 = 32−12p1 and for the Green Zone Boxes It will be q2 = 42 − p2. The number of tickets sold for the Red Zone and Green Zone will be: 15; 84 23; 16 15; 19 33; 45