1- A markets consists of five identical producers employing a production plan that uses inputs x1 and x2 with prices w, and w2 respectively, to produce output y. Their cost function is: c(W1, W2, y) = min{wf, w}y, where a > 0 What value of a is compatible with the standard properties of cost functions? Explain.
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- The data below shows tabulation on the production of a hypothetical product.Output (Q) Total cost (TC)Units Kshs.0 - 251 - 322 - 383 - 424 - 485 - 586 - 677 - 788 - 98i. Using the above data, determine:· Total fixed cost · Average variable cost schedule · Marginal cost schedule Suppose this product is produced on a perfect market and the price of the commodity = 10, determine the output Q that will maximize the profits. What is the maximum profits achieved by the firm?A firm has access to two production processes with the following marginal cost curves: MC1 = 0.25x and MC2 = 6+0.1y, where output in production process 1 is x, output in production process 2 is y and hence total output produced is Q = x+y. Show your work to answer the following questions. (i) If it wants to produce 20 units of output, how much should it produce with each process? (ii) If it wants to produce 38 units of output, how much should it produce with each process? (iii) If it wants to produce 108 units of output, how much should it produce with each process?Assume that a competitive firm has the total cost function: TC=1q3−40q2+880q+2000 T C = 1 q 3 - 40 q 2 + 880 q + 2000 Suppose the price of the firm's output (sold in integer units) is $550 per unit. Create tables (but do not use calculus) with columns representing cost, revenue, and profit to find a solution. How many units should the firm produce to maximize profit? Please specify your answer as an integer. What is the total profit at the optimal output level? Please specify your answer as an integer.
- *** Please answer e, f, g,h** An ice cream company finds that at a price of $4.00 for each pint, they can sell 4000 pints of ice cream per day. For every $0.25 decrease in price, daily demand increases by 200 units. The company’s cost function is C(q)=0.01q2-90q+211600, where C represents their daily costs (in dollars), and q is the number of pints sold per day. a)Find the demand function q(p). b) Find the revenue function R(q). Hint: first you will need to solve for p in terms of q from the demand function.) c) How many pints should the company sell per day if they want to maximize their revenue? d) what price should the company charge for each pint if they want to maximize their revenue? e)Use the criteria MC(q)=MR(q) to determine how many pints the company should sell per day if they want to maximize their profit. f)What is the maximum profit the company can earn per day? g)Find the average cost function. h)How many pints should the company sell per day if they want to minimize…Modified True or False: State whether each statement is true or false. If the statement is false, briefly explain why it is so, and then restate it to make it true. The shapes of long-run cost curves follow directly from the assumption of a fixed factor of production, which implies diminishing returns. The optimal scale of plant is the scale of plant that maximizes average cost. In the long-run competitive equilibrium, each individual firm chooses a scale of operations that minimizes its long-run average cost. Answer correctly and explain within 30mins will give you positive feedback.Suppose a typical (representative) corn farm has a short run production technology which results in the outcome of U-shaped Average Variable Cost (AVC), Average Total Cost (ATC), and Marginal Cost (MC). Further, suppose this firm sells its product in a market where the price of the good is determined by the interaction of market Demand and Supply. Because an individual firm is very small compared to the rest of the market, we treat the market price as the price given to the firm, and the individual firm cannot impact that price. assume we are in the Short Run for this firm. In graphing, put $ on the vertical axis and lower-case q (firm output) on the horizontal axis. Start with the AFC0, AVC0, ATC0, and MC0 curves . show shifts in any of the cost curves, reflecting the higher cost of land (keeping in mind that this higher cost is independent of how much or how little corn is actually produced) and labeling the changed cost curves with a subscript 1. On the graph with $ on the…
- A manufacturing firm faces the cost of production as follows : Quantity Total Fixed Costs Total Variable Costs 0 $ 100 0 1 $ 100 $ 40 2 $ 100 $ 60 3 $ 100 $ 80 4 $ 100 $ 130 5 $ 100 $ 190 6 $ 100 $ 350 (a) Calculate the company's average fixed costs, average variable costs, average total costs,, and marginal costs at each level of quantity larger than zero (b) Suppose the price of the firm's product is $ 90, what is the firm's optimal production quantity? What is the firms profit under this quantity?A firm has access to two production processes with the following marginal cost curves: MC1 = 0.25x and MC2 = 6+0.1y, where output in production process 1 is x, output in production process 2 is y and hence total output produced is Q = x+y. Show your work to answer the following questions. If it wants to produce 20 units of output, how much should it produce with each process?A firm's demand and total cost function are given by the expression: P = 20 - Q/2 (1) TC = 0.5Q2 + 36 (2) Where P is price per unit in £ TC = total cost in £ Q is quantity demanded and produced. Find the profit-maximising level of output using the profit function and calculate how much profit is made at this output level.
- Suppose Larry's Lariats produces lassos in a factory, and uses nine feet of rope to make each lasso. The rope is put into a machine that automatically cuts it to the right length, then seals the ends to prevent fraying. The rope is then hand tied, dipped, and wound before being placed in a packaging machine to prepare it for retail sale. Which of the following would be considered a fixed cost for this company? Question 2 options: a Employee wages b The cost of rope c The packaging material d None of these would be considered a fixed cost.Answer b and c Road Runner Co is a Pakistani manufacturer making Bicycles. It exports to two markets,Bangladesh and Sri Lanka. Demand for Bicycles in thesetwo markets is given by the following Functions: Bangladesh Q1 = 12 – P1 Sri Lanka Q2 = 8 – P2 Where Q1 and Q2 are respective quantities sold (in thousands) andP1 and P2 are the respective prices (in Pak. Rupees per unit) in the two markets. Total cost function is C = 5 + 2 (Q1+ Q2) a. Determine the company’s total profit function. Also, (i) What are the profit maximizing levels of price and output for the two markets? (ii) Calculate the marginal revenues in each market. b. Now consider two cases: (i) Company is effectively able to price discriminate in thetwo markets. What will be the total profits? (ii) Suppose the company does not engage in price discrimination. By charging thesameprice in the two markets what are the profit maximizing levels of price,output, and the total profits? c. Analyze,…Suppose the situation changes. JointJuice has its plant in Portland Oregon. The local government passes a new tax on businesses that raises JointJuice’s fixed cost by $25 per period. The cost function now becomes: C(q) = 300 + 6q + 0.1q^2 All the other firms in the market are in other states/cities that are not subject to the laws or taxes of Portland. Calculate JointJuice’s optimal output level and profits if the market price for the product stays the same as for part a. What will the firm do in the long run? Is it reasonable to assume the market price prevailing today will remain the same in the long run? If so why? If not, why not? How about the number of firms in the market?
