13) The cobalt mining company is perfectly competitive. Each existing firm and every potential entrant faces an identical U- shaped average cost curve. The minimum level of average cost is $5 per ton and occurs when the firm produces y = 2 million tons of cobalt per year. The market demand curve for cobalt is Y = 205 - p, where Q is in millions of tons per year and the market price p is in dollars per ton. d) If the demand fell to Y = 185 - p, briefly expiain what you would expect to happen to the following in the long run: i) price. ii) firm quantity. iii) firm profits. iv) the number of firms.
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- You are a manager at Spacely Sprockets—a small firm that manufactures Type A and Type B bolts. The accounting and marketing departments have provided you with the following information about the per-unit costs and demand for Type A bolts: Materials and labor are obtained in a competitive market on an as-needed basis, and the reported costs per unit for materials and labor are constant over the relevant range of output. The reported unit overhead costs reflect the $10 spent last month on machines, divided by the projected output of 2 units that was planned when the machines were purchased. In addition to the above information, you know that the firm’s assembly line can produce no more than five bolts. Since the firm also makes Type B bolts, this means that each Type A bolt produced reduces the number of Type B bolts that can be produced by one unit; the total number of Types A and B bolts produced cannot exceed 5 units. A call to a reputable source has revealed that unit costs for…Suppose that demand for a particular style of handmade Rwandan baskets is Qd = 1700 – 10P. Each basket maker has the following cost function: TCi = 1000 + 50 qi + .1 qi^2. Given this information, find the market outcomes under the various market structures below Perfect competition, long-run. Given the same cost functions above, find the long-run equilibrium quantity per firm, the LR market price, market quantity and equilibrium number of firms. What is the profit or loss per firm? What is MCi and ATCi?Suppose a competitive industry has 1,000 identical firms. After years of firms entering and exiting this industry the market is now in a stable equilibrium where all surviving firms are of the optimal size (their fixed costs are exactly such that the long run costs and short run costs are identical). Each firm has a total cost curve of: TC = 2 + 4q + .5q2. This total cost curve implies a marginal cost curve of: MC = 4 + q. a) How much will each firm produce? b) What is the equilibrium price in this market?
- Assume a competitive market in which each firm with has a cost function of: 0.2q3 -7.9q2 +181q. Q1: If the current market price is $87 per unit, how many units will this firm provide to the market? Q2: What are the short-run profits of this firm? Q3: What is the long-run market price, and how many units will each firm provide to the market? Q4: IF the demand func. for this market is P(Q)=1169.49-2Q, how many firms will run in this market in the long-run?The 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 answerWakanda is a firm that solely supplies vibranium to Marley and Paradis. The demand function of the Marley market is given as QM=110-PM , and the demand function of the Paradis market is QP=30-PP . Wakanda’s total cost in producing vibranium is given as TC=100+10Q , where represents a ton of vibranium. 5. Compute the mark up price on each market and interpret the results.
- Bitcom, a manufacturer of electronics, estimates the following relation between marginal cost of production and monthly output: MC= $150+ 0.005Q What does this function imply about the effect of the law of diminishing returns on Bitcom’s short-run cost function? Calculate the marginal cost of production at 1,500, 2,000, and 3,500 units of output. Assume Bitcom operates as a price taker in a competitive market. What is this firm’s profit-maximizing level of output if the market price is $175? Compute Bitcom’s short-run supply curve for its product. Provide a 100 word summary of how this can be applied to the current economy. Show Calculations and can it be done in Excel?Assume the following cost data are for a purely competitive producer: Using the data in 3d, assume that there are 1500 identical firms in this competitive industry; that is, there are 1500 firms, each of which has the cost data shown in the table. Complete the industry supply schedule (column 4).Consider a company that operates in a competitive market, with a typical set of cost curves (Marginal Cost, Average Variable Cost, Average Fixed Cost and Average Cost with typical formats of Microeconomics theory). Consider further that Marginal Costs coincide with Average Total Costs when the firm's output is 200 units of output, at a market price of 50. If market prices fall to 40, the company will produce 180 units of product to maximize its profit. If at this point the Average Fixed Costs per unit of output equals 27 per unit of output, what are your recommendations for this company in the short term? And in the long run?
- 1. Upon signing the lease and paying 5,000 php, how large are ACME’s fixed costs? Its sunk costs?2. One day after signing the lease, ACME realizes that it has no use for the railcar. A farmer has a bumper crop of corm and has offered to sublease the railcar from ACME at a price of 4,500 php. Should ACME accept the farmer’s offer? Why or why not?Suppose that the industry is a constant cost industry and entry and exit of firms are allowed. Assume the firm’s long-run cost function is given by LC = 1/300q3 - 0.2q2 + 4qa. Identify the most efficient plant size for the firm in the long-run by calculating the equilibrium output level. Brief discuss the process used to get your answer. b. Calculate the long-run equilibrium market price in this industry. Brief discuss the process used to get your answer.c. If the market demand for these firm’s product is Q = 8,000 – 200p½, determine the number of firms in the market under a long-run equilibrium. Brief discuss the process used to get your answer.1- Suppose that the total cost function of a firm is given as follows;TC = 500 + 2Q2And the price of the firm’s product is determined by the market equilibrium at $100.a- Set the profit maximizing condition . Find the profit maximizing output level for this firm .b- What is the total revenue ?c- What is the total cost ?d- What is the profit earned by the firm ?e- Illustrate your answer by using a well-labeled graph .f- Denote the break even price level with Pb on the same graph .g- Denote the shut down price level with Ps on the same graph.h- Show the firm’s supply curve on the same graph .i- Does the firm function in short-run or long-run ? Why ?