You are the owner of a firm in a perfectly competitive market. The market supply and demand are given by the equations: D: P=8 - 0.1Q S: P = 0.2 + 0.05Q Your firm's marginal cost curve and total cost curve are: МС - 0.1 +0.29 MC TC = 20. 425 + 0. lq +0.1q? What is the firm's profit (positive) or loss (negative) ? O 2.2 (profit) 18.225 (profit) -18.225 (loss) -2.2 (loss)
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![You are the owner of a firm in a perfectly competitive market. The market supply
and demand are given by the equations:
D: P=8 - 0.1Q
S: P = 0.2 + 0.05Q
Your firm's marginal cost curve and total cost curve are:
MC = 0.1 + 0. 2q
TC = 20.425 + 0. 1q +0.1q?
What is the firm's profit (positive) or loss (negative) ?
O 2.2 (profit)
O 18.225 (profit)
O -18.225 (loss)
-2.2 (loss)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa101e78d-a6bb-409c-be1d-03385d26c45f%2Fb0a9399d-d50b-4fee-9d0c-a87956cd0375%2F5ls17jd_processed.jpeg&w=3840&q=75)
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- A firm in a perfectly competitive industry has patented a newprocess for making widgets. The new process lowers the firm’saverage cost, meaning that this firm alone (although still aprice taker) can earn real economic profits in the long run. a. If the market price is $20 per widget and the firm’s marginalcost is given by MC=0.4q , where q is the dailywidget production for the firm, how many widgets willthe firm produce? b. Suppose a government study has found that the firm’snew process is polluting the air and estimates the socialmarginal cost of widget production by this firm to be. If the market price is still $20, what is thesocially optimal level of production for the firm? Whatshould be the rate of a government-imposed excise tax tobring about this optimal level of production? c. Graph your results.1. Emad is a lettuce supplier in a perfectly competitive lettuce market in Kuwait. If the demand for lettuce in Kuwait is given by: Qo = 40,000 – 10,000P, Where Q is the quantity of lettuce boxes and P is the price of a lettuce box. In the short-run, Emad's has the following total cost function for his production of lettuce: TCimad = 0.25Q +Q +3 Assume that Emad is one of 1000 sellers in the Kuwaiti lettuce market with identical costs. Answer the following questions: e. wnat is tne market suppiy tunction in the short-run? 1. What is the short-run equilibrium price and equilibrium quantity in this market? g. Draw a rough sketch of the market demand and supply functions, showing the optimal point and all intersections with the horizontal and vertical axes. h. What is the demand function for Emad's lettuce in the short-run?Assume that a firm in a competitive market faces the following cost information. If the market price for this firm's product is $40, calculate the profit maximizing level of output for this firm using marginal analysis. It may help to create your own cost table and fill in columns for Marginal Cost and Average Total Cost based on the Total Cost information below. a.What is the level of profit for this firm at the profit maximizing output? b.To convince yourself that the quantity you found is indeed the profit maximizing quantity, try calculating what the profit would be at the next higher level of output. What did you find? c. What do you predict will happen in this market over the long run?
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