The treadmill market is a competitive industry with long-run economic costs. Provided the following information, what is the long-run equilibrium price in this industry? CLR(q) =32+2q² MC=4q Avg. cost = 32/q+2q
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- Flora sells flowers in a perfectly competitive market. These cost functions represent her daily cost functions. TC = 100 + 0.50 + .2502 MC = 0.5 + 0.50 The current price is $9.50 Determine the profit/loss for Flora. Round to the penny. Suppose this is Flora's daily cost functions. This (profit/loss) value is expected to be constant for the next two weeks.What advice you would give her for these next two weeks related to running her business? Explain why.Market Representative Firm MC АТС $8 AVC A $6 MR = P %3D D1 20,000 100 125 Quantity (Q) Output (Q) The diagram above depicts overall market supply and demand on the left, and the cost curves for a representative firm supplying in that market on the right. When the market reaches its Long Run Equilibrium, we should expect the firm to produce and the equilibrium quantity in the market to be 125; less than 20,000 125; more than 20,000 100; less than 20,000 O 100; more than 20,000 Pricea) Find the long run equilibrium price. Find the minimum efficient scale of the typical firm. Find the typical firm’s average cost when it operates at minimum efficient scale. In the long run, what price will prevail in this market? In words, clearly justify your answer. Suppose demand is QD = 3,200 – 100P. (b) Explain why you expect the number of firms in this market to be fifty-five. In this market, what is the short run supply function of the typical firm? What is the short run market supply function? Suppose the local government introduced a $90 licensing fee that raised the fixed cost from $160 to $250. c) Would the introduction of the licensing fee affect the short run equilibrium price or quantity? Justify your answer? Clearly explain why you expect that in the long run fewer larger firms will operate in this market. After the introduction of the licensing fee, what is the new long run equilibrium price? How many firms will survive in this market?
- A competitive firm's cost of producing q units of output is TC=18+4q+q^2 Its corresponding marginal cost is MC=4+2q The firm faces a market price p = $24. Create a spreadsheet with q = 0, 1, 2, …, 15, where the columns are q, TR, TC, TVC, AVC, MC, and profit. Determine the profit-maximizing output for the firm and the corresponding profit. Should the firm produce this level of output or should it shut down? Explain briefly. Suppose the competitive price declines to p = $12. Repeat the calculations of part a. Should the firm shut down?The monthly average variable costs, average total costs, and marginal costs for Alpacky, a typical alpaca wool-manufacturing firm in Peru, are shown in the table below. All firms in the industry share the same costs as Alpacky, and the industry is in long-run equilibrium. Output (units of wool) 0 1 PASSE 2 5 AVC ($) - ✔ 25.00 21.50 ATC ($) 19.89 35.00 26.50 ne monm3 averane 1967 23.09. Sem QUO ***** www.w Peru, are shown in the table belom. All time in the Industry share the same costs as Alpacky, and the Industry is in long-run equilibrium. 4 19.25 21.75 21.88 Instructions: Round your answer to two decimal places. : MC ($) A 25.00 AUT 18.00 16.00 22.00 Given that the market is in long-run equilibrium, the market price is: $ ATVIIn the market for foam fire retardant there is only one firm. The demand func-tion for the product is Q = 15,000 – 10P where Q is the annual sales quantity in tons and P is the price per ton. The firm’s total cost function (in dollars) is C = 1,400,000 + 300Q + 0.05Q2.a) How much foam fire retardant should this firm produce and sell in order to maximize its profit? What price should it charge?b) Compute the firm’s total profit.c) Suppose now that the firm faces a 20% increase in variable costs. Determine what impact this will have on the firm’s optimal choice.
- 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 you own a firm that manufacturers T-shirt in a competitive market. Your short-run cost of producing T-shirts is given by C(q) = 50 + 3q2 where C is the total cost of production and q is the level of output. What is the shutdown price? Only typed answer pleaseThe market determined price in a perfectly competitive industry is P = Rs. 10. Suppose that the total cost equation of an individual firm in the industry is given by the expressionTC 1000+2Q+0.01Q2 What is the firm’s profit-maximizing output level and profit? Is this profit normal profit or supper normal profit? Justify your answer
- A competitive firm faces the following market price: P=200. Variable costs are C(Q)=Q^2. The firm also pays $17000 in costs that do not depend on production (even if q=0). Hint – marginal cost is MC(Q)=2*Q NOTE - KEEP YOUR CALCULATIONS. THIS INFORMATION WILL BE USED IN MULTIPLE QUESTIONS What is the optimal quantity this firm should produce? Question 6 options: 0 50 200 100A manufacturer of electric switches in a competitive industry has a fixedmonthly cost of $50,000, total monthly variable cost $100,000, and marginalcost of $5. What is the profit if the monthly production is 100,000 units?Assuming that prices of switches fluctuate from month to month, what is the lowest price the manufacturer can accept in order to stay in business in the long run and in the short run. Will those prices be the same? Show detail workThe monthly average variable costs, average total costs, and marginal costs for Alpacky, a typical alpaca wool-manufacturing firm in Peru, are shown in the table below. All firms in the industry share the same costs as Alpacky, and the industry is in long-run equilibrium. Output (units of wool) 0 1 2 3 4 5 AVC ($) 25.00 21.50 19.67 19.25 19.80 ATC ($) 35.00 26.50 23.00 21.75 21.80 MC ($) 25.00 18.00 16.00 18.00 22.00 Instructions: Round your answer to two decimal places. Given that the market is in long-run equilibrium, the market price is: $