Suppose that a perfectly competitive firm's total cost function is TC = q? + 20q+ 256, where q is the firm's output level. What is the firm's output level (q*) in the long run? O q* = 10 units. %3D q* = 16 units. q*: = 20 units.
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- Tåble Cost.EX2: Costs and Outputs for a Competitive Firm Total Total Output Fixed Variable (Q) Costs Costs 0. $50.00 $0.00 1 $50.00 $70.00 $50.00 $120.00 $50.00 $150.00 4 $50.00 $220.00 $50.00 $300.00 Refer to Table Cost.EX2. When production is 3 units, the firm's average total cost is'about O $66.67 $68.67 No answer text provided. O No answer text provided.Question 18 Suppose a perfectly competitive firm faces the following situation: P = $10, output= 3,000, ATC= $8.50, MC $11, and AVC=$7.50. Which statement accurately describes the firm's situation? = O The firm incurs a loss and is minimizing its losses. O The firm carns a profit but should increase output to maximize its profits. O The firm is maximizing its profits. The firm earns a profit but should decrease output to maximize its profits.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? $
- 4. A competitive firm has the three-factor production function f(x, y, z) = (x + y)2/3z4/3. The factor prices used to be w = 4, wy = 2, and w, = 1. Suppose %3D that the price of factor y doubled while the other two prices stayed the same. Then the minimum cost of production: A. doubled. B. increased by more than 50% but less than 100%. C. increased by less than 50%. D. stayed the same.Assume that the marginal revenue equals rising marginal cost at 100 units of output. At this output level, a profit-maximizing firm's total fixed cost is $700 and its average variable costs are $5. If the price of the product is $4 per unit and the firm produces the profit-maximizing level of output, How much profit firm will earn ?After serving as President of the United States for eight years, Dena has retired from politics and has decided to become a wheat farmer. The market for wheat is perfectly competitive and the current market price for wheat is $10 per bushel. Dena is currently producing 8 bushels (Dena can only produce this good in whole units). Her total cost at 8 units of output is $88 and her variable cost at 8 units of output is $64. Dena knows that if she produces a 9th unit her total cost will become $97, and if she produces a 10th unit her total cost will become $110. Dena’s goal is to maximize her profits. Based on this information, identify whether each of the following would be true or false and briefly explain your reasoning. Dena is currently losing money in the short-run and she would be better off if she shutdown and produced zero. Dena is not currently profit maximizing at 8 units of output and she could increase her profits if she expanded output by one unit. Dena would increase her…
- Suppose a perfectly competitive firm's total cost of production (TC) is TC(q) q-4q60q + 15 and the firm's marginal cost of production (MC) is MC(q) 3q-8q+ 60 The firm's short-run supply curve is given by O A. P 3q-8q+60 for prices above $4. O B. P =q-4q+60+ 15 O C. P 3q-8q+ 60 for prices above $56 O D. p q-4q+ 60 for prices above $56 O E. P q-4q+ 60 for prices above $1Suppose 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?pshotic 166& 5. Profit maximization and shutting down in the short run Suppose that the market for microwave ovens is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. 100 90 80 ATC 70 60 40 30 AVC 20 10 MC 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of ovens) Σ 50 PRICE (Dollars per oven)
- Suppose that the perfectly competitive firm with the costs and revenues shown in the figure to the right is contemplating whether or not to produce 12 units of output. If the firm were to produce the 12th unit and, in doing so, increase its hourly total costs to $68 from $56, what would be its marginal cost? Would producing 12 units maximize the firm's profits? What would be the firm's total revenues per hour? What would be its hourly economic profits? If it were to produce the 12th unit, the firm's marginal cost would be MC = $ nothing per unit. Since the market price is P = $ nothing per unit and this price ▼ is larger than equals is less than the firm's marginal revenue, marginal cost ▼ is less than is larger than equals marginal revenue, and producing the 12th unit ▼ would would not satisfy the profit-maximizing rule. The firm's total revenue would equal $ nothing per hour and economic profits would equal $ nothing per hour. (Enter your responses as whole…Suppose q = f(L,K) =2L¹/2 What is the marginal cost in the long-run of the firm? O MCLR(q) = q4/2 MCLR(q) = q2 / 4 O MCLR(q) = q /4 O MCLR(q) = 8q³/3 O MCLR(q) = 4q²/2 + 2K1/2 and the prices or labor and capital are w=$1, r=$1.Assume that there are 100 identical company in the perfectly competitive cabbage industry. Each firmhas a short-run total cost curve given by ST C = 0.5Q2 − 10Q + 300. Solve the following: 1. Derive expressions for the corresponding short-run average cost, average variable cost,average fixed cost curve, and marginal cost.2. Calcalute the firm’s short-run supply curve with market price (P) as a function of Q (thenumber of kilos of cabbage)3. Show the industry supply curve for the 50 firms in this industry