The demand curve for guitars is given by Pd = 200 - 5Qd and supply for guitars is given by Ps = 20 + Qs. What is total surplus at equilibrium? 2,700 2,250 450 5,400 Suppose that a firm in a competitive industry has the following cost functions: Total Cost: TC = 100 + q2 Marginal Cost: MC = 2q If the price of the good is $200, what is the firm's profit in the short-run equilibrium? 6400 1000 3200 9900
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- Suppose the price of bagels in Allentown is currently S0.90 per bagel. There are 10 low-cost bakeries and 10 high-cost bakeries that can produce bagels, each of which has the supply function Qow-cot= 200P - 105 Ohigh-cost = 200P - 205 (These individual supply functions apply in the short run and the long run.) low-cost bakery: high-cost bakery: a. Which bakeries will be active when the price is $0.90? Only low-cost bakeries will be active b. If the price rises to $1.40, what will be the market supply in the short run? What will be the market supply in the long run?The inverse demand for tea is given by P= 10 – 0.04Q, where Pis the price per a gram of tea and Qis the total number of grams of tea brought to market. There are two tea shops in the market. Shop 1's cost function is given by C = 0.01q,?, where qı is the number of grams of tea it brings to market. Shop 2's cost function is given by C2 = 0.01q2², where qp is the number of grams of tea it brings to market. Given that the two shops compete by setting output (Cournot), answer the following. a) Identify shop 1's reaction function to shop 2's output to within 2 decimal places (e.g. 0.33). 91= Number - Number 92 b) Identify shop 2's reaction function to shop 1's output to within 2 decimal places (e.g. 0.71). q2= Number Number 91 c) To within two decimal places (e.g. 0.63) what is the equilibrium output level of each shop and the equilibrium per gram price for tea. Shop 1 will produce Number grams of tea and shop 2 will produce Number grams of tea. The equilibrium market price is £ NumberSuppose that the market for black sweaters is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. 50 45 Profit or Loss 40 35 ATC 20 15 AVC 10 MC 4 10 12 14 16 18 20 QUANTITY (Thousands of sweaters per day) In the short run, at a market price of $15 per sweater, this firm will choose to produce Sweaters per day. On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $15 and the firm chooses to produce the quantity you already selected. Note: In the following question, enter a positive number, even if it represents a loss. The area of this rectangle indicates that the firm's v would be$ thousand per day in the short run. PRICE(Dollars per sweater)
- The market for paperback detective novels is perfectly competitive. Market Demand is given by Q=450-6P. Market Supply is given by Q=4P-13. Suppose 21 units are bought to the market. Consider the Marginal Cost of production for these 21 units. What is the maximum Marginal Cost of production of these 21 units? Enter a number only, do not include the $ sign. Hint: 21 doesn't have to be the market quantity.Suppose that the market for dress shirts is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. 50 45 Profit or Loss 40 35 30 ATC 25 20 15 AVC 10 MC 4 10 12 14 16 18 20 QUANTITY (Thousands of shirts per day) In the short run, at a market price of $15 per shirt, this firm will choose to produce shirts per day. On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $15 and the firm chooses to produce the quantity you already selected. Note: In the following question, enter a positive number, even if it represents a loss. The area of this rectangle indicates that the firm's would be $ thousand per day in the short run. PRICE (Dollars per shirt)The inverse demand for tea is given by P = 8 – 0.03Q, where Pis the price per a gram of tea and Q is the total number of grams of tea brought to market. There are two tea shops in the market. Shop 1's cost function is given by C = 0.02q,?, where q, is the number of grams of tea it brings to market. Shop 2's cost function is given by C2 = 0.02q22, where q2 is the number of grams of tea it brings to %3D %3D market. Given that the two shops compete by setting output (Cournot), answer the following. a) Identify shop 1's reaction function to shop 2's output to within 2 decimal places (e.g. 0.33). 91= Number Number 92 b) Identify shop 2's reaction function to shop 1's output to within 2 decimal places (e.g. 0.71). q2= Number Number 91 c) To within two decimal places (e.g. 0.63) what is the equilibrium output level of each shop and the equilibrium per gram price for tea. Shop 1 will produce Number grams of tea and shop 2 will produce Number grams of tea. The equilibrium market price is £…
- The following graph plots daily cost curves for a firm operating in the competitive market for designer handbags. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. 80 70 W 60 50 ATC AVC PRICE (Dollars per bag) 100 90 40 30 20 10 0 0 MC 10 20 30 40 50 60 70 80 QUANTITY (Thousands of bags per day) 90 100 Profit or Loss In the short run, given a market price equal to $45 per bag, the firm should produce a daily quantity of of On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $45 and the quantity of production from your previous answer. bags. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run thousand per day for the firm.Suppose that the market for candles is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. 40 36 Profit or Loss 32 28 24 20 ATC 16 12 AVC MC 4 8 2 4 6 QUANTITY (Thousands of candles per day) 10 12 14 16 18 20 In the short run, at a market price of $20 per candle, this firm will choose to produce candles per day. On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $20 and the firm chooses to produce the quantity you already selected. Note: In the following question, enter a positive number, even if it represents a loss. The area of this rectangle indicates that the firm's would be S thousand per day in the short run. PRICE (Dollars per candle)For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down, it will produce. (Hint: You can select the purple points [diamond symbols] on the graph to see precise information on average variable cost.) Price Quantity Total Revenue Fixed Cost Variable Cost Profit (Dollars per air freshener) (Air fresheners) (Dollars) (Dollars) (Dollars) (Dollars) 10.00 44,000 16.00 44,000 40.00 44,000 If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's fixed cost is $44,000 per day. In other words, if it shuts down, the firm would suffer losses of $44,000 per day until its fixed costs end (such as the expiration of a building lease). This firm's shutdown price-that is, the price below which it is optimal for the…
- Assume the market for tortillas is perfectly competitive. The market supply and demand curves for tortillas are given as follows Supply curve:P = 5Q Demand curve: P = 120 - 10Q The short run marginal cost curve for a typical tortilla factory is: MC = 20q Assuming all tortilla factories are identical, calculate the following: Equilibrium price for tortillas: 1 8 Profit maximizing short run equilibrium level of output for a tortilla factory: (2) Given profit maximizing output as above, a tortilla factory is: (3 Total number of tortilla factories: Producer surplus of a tortilla factory: (5Consider the 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. (?) 80 72 04 55 ATC y 40 D 32 10 AVC 8 MC 0 0 6 18 21 24 30 QUANTITY (Thousands of pounds) The following diagram shows the market demand for copper. 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 plot the short-run industry supply curve when there are 40 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 60 firms. (?) 80 72 Supply (20 firms) 64 Demand 58 33 Supply (40 firms) 40…Suppose that the market for air fresheners is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. 40 36 Profit or Loss 32 28 ATC AVC MC 4 2 4 6 10 12 14 16 18 20 QUANTITY (Thousands of air fresheners per day) In the short run, at a market price of $20 per air freshener, this firm will choose to produce v air fresheners per day. On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $20 and the firm chooses to produce the quantity you already selected. Note: In the following question, enter a positive number, even if it represents a loss. The area of this rectangle indicates that the firm's v would be $ thousand per day in the short run. PRICE (Dollars per air freshener)