2. Consider a market with 90 firms, each firm has a short-run total cost function as follows: TC(q) = 5q°, and a marginal cost function: MC(q) = 1Oq. Market demand is given by equation Q°(p) = 200 - p. a. What is the fixed cost? Solve the average variable cost function in the short-run. b. What is the supply function of each firm? c. Solve for the short-run equilibrium outcome: P*, Q* and q*.
Q: Table 14-6 There are 500 identical firms in a competitive market. The firms do not use any resources…
A: Competitive market: Competitive market/perfect competition is a market structure where there exists…
Q: 3. (a) Suppose a perfectly competitive firm has the following total cost function for the short run:…
A: Perfect competition is a market structure in which all the firms in the market sells identical…
Q: Q)Assume that a competitive firm has the total cost function: TC=1q^3−40q^2+740q+1600 Suppose the…
A: Answer: Given, Price = $650 per unit Total cost function: TC=1q^3−40q^2+740q+1600 Quantity Total…
Q: Assume that a firm in a competitive market faces the following cost information. If the market price…
A: PLEASE FIND THE ANSWER BELOW.
Q: Consider the following cost information for a firm that operates in a perfectly competitive market.…
A: Marginal cost is the additional cost incurred with an additional unit of output produced. A…
Q: 2. Suppose the total cost function of a firm that produces hotdogs is C= 150q - 4q° + 29' where q is…
A: Answer to the question is as follows:
Q: Question 1) Fixed costs of a competitive firm is cER* and the short-run supply function of the firm…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Assume that the above cost data is for a perfectly competitive firm. Using this data answer the…
A: Answer to the question is as follows :
Q: A perfectly competitive firm’s short-run total cost curve is C(q)= 100q-4q2+0.2q3+450.…
A: 1. Short run supply curve is the part of MC after AVC = MC We first have to find the point where MC…
Q: 3. The industry producing and selling wooden pallets is comprised of 100 identical firms each of…
A: We are given the Total Cost function , We know that the rising portion of the MC curve above the…
Q: A perfectly competitive rm produces output q with capital K and labor L according to the production…
A: (d) We can calculate the value q at which the minimum of ATC occur as follows.
Q: 5. Suppose a firm faces the following long run total cost function: TC =q³ - 20q² + 200q. What is…
A: Answer: Given, Total cost function:TC=q3-20q2+200q Let us assume that the given cost function is of…
Q: Assume the following unit-cost data are for a purely competitive producer.
A: Profit maximizing conditions for a competitive market are - Necessary Condition : P = MC Sufficient…
Q: Suppose that the total cost function of a firm is given as follows; TC = 500 + 2Q2 And the price…
A: A rational producer attempts to maximize his/her/their profit in the course of production by…
Q: 2. Suppose that a perfectly competitive firm uses two inputs to produce one output. The conditional…
A: We will use profit maximisation and substitution methods to answer this question.
Q: 4. A profit-maximizing firm has cost function C(Q) = 500 + 10Q + 200?. 4a.What is the firm's…
A: Marginal cost is the cost incurred when one additional unit of output is generated.
Q: The short-run marginal and average cost curves for a firm are displayed below. When q= 2 and q= 6,…
A:
Q: PROBLEM #1 The cost function for a typical firm, competing in a perfectly competitive market, is as…
A: Average variable cost (AVC) = Average total cost (ATC) / quantity (q) Marginal cost (MC) =…
Q: 1. In a perfectly competitive and constant cost industry, all firms are identical. If the market…
A: We are going to find the long run equilibrium to answer this question.
Q: 4. The cost function for a firm facing perfect competition is C(q)=1000+25q-0.5q²+0.01q^3 What is…
A:
Q: a) Derive the total cost function, then find the firm’s average variable cost, average fixed cost,…
A: Since you have asked multiple questions under each sub-part, we will answer only the foremost…
Q: A firm in a perfectly competitive industry has fixed costs of FC = 15, marginal costs of MC = 5 +…
A: Formulas of cost: 1. AVC = TVC * q 2. TC = TVC + TFC where, AVC is Average Variable Cost TVC is…
Q: 2. Consider a market with 90 firms, each firm has a short-run total cost function as follows: TC(q)…
A: Fixed cost is that part of total cost that does not depend on quantity. It remains fixed even when…
Q: You are the manager of a firm that sells its product in a competitive market at a price of $60. Your…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: 4. A profit-maximizing firm has cost function C(Q) = 500 + 10Q + 200. 4a.What is the firm's marginal…
A: Please find the answer below.
Q: Explain ''that segment of a competitive firm's marginal-cost curve that lies above it's average-…
A: A perfectly competitive market is the one where firms are price takers and they can sell any…
Q: In a perfectly competitive and constant cost industry, all firms are identical. If the market demand…
A: The perfectly competitive market is the market structure where a large number of firms compete in…
Q: The following table gives information about a firm’s short-run cost function in a perfectly…
A: The perfect competition is a market where a large number of sellers sells identical or homogenous…
Q: 3. A perfectly competitive individual firm operates in a constant cost industry and produces a level…
A:
Q: Construct a short-run supply schedule for the firm and indicate the profit or loss incurred at each…
A: We have to construct the supply schedule from the given unit cost data. We know that the supply…
Q: A firm in a perfectly competitive market has a short-run total cost function equal to SRTC=4+20q,…
A: Perfect competition is a type of market where the price and quantity of goods sold is determined by…
Q: 9 The total cost function for a PC firm is as follows: TC=100+160Q-8Q2+0.4Q3 What is the minimum…
A: In the short run the firm has to incur fixed cost. The production decision in the short run depends…
Q: na perfectly competitive market demand function of a good is Q" = -30P+2250 and supply function is…
A: Given Perfectly competitive market. Demand function = Qd = -30P + 2250. Supply function = Qs =…
Q: In a certain perfectly competitive market, there are 150 firms, and the short-run total cost…
A: Since the question you have posted consists of multiple parts, we will answer the first three…
Q: TC(q)= 4q^2 + 8. The market demand function is Q(p) = 800 - 15p, and there are 40 identical firms in…
A: We have given that The total cost function of the firm TC(q)= 4q2+8 ...... (1) Market…
Q: The long-run cost function of a firm producing widgets in a competitive market is given by c(y) =…
A: We are going to use concepts such as Price = Minimum Average total Cost.
Q: ost curve is usually U-shaped. Therefore, in a perfectly competitive m
A: The maximization of profit is the process by which a firm might tend to determine the levels of…
Q: Need help with top half of attached picture
A: Answer - Dear student Thank you for submitting your question. Since we only answer up to 3 sub parts…
Q: Consider a market with 90 firms, each firm has a short-run total cost function as follows: TC(q) =…
A: Firms in perfect competition are takers because there exists large number of firms selling identical…
Q: 6. Suppose a competitive firm's production function is q(x) = ax3 –b, where a > 0 and b > 0. q is…
A: Production function : q(x) = ax1/3 - b Price of input (x) = c Competitive firms optimizes its…
Q: Q -1: For an individual firm in a perfectly competitive market, let its cost function be c(y) = 8y2…
A: Definition: Perfect competition leads to the Pareto-productive allocation of financial assets. On…
Q: The cost function faced by a firm in a perfectly competitive market is the following ctyl-dy+10y+25,…
A: Total Cost (C) = 4y2 +10y+25 Average Total Cost (ATC) = C/y ATC = 4y + 10 + 25/y
Q: A firm sells its product in a perfectly competitive market. Its total cost function is: TC = 900 -…
A: Hi! thankyou for the question but as per the guidelines, we answer only 3 parts at one time. Kindly…
Q: Assume that the marginal revenue equals rising marginal cost at 100 units of output. At this output…
A: The income gained by increasing product sales by one unit is referred to as marginal revenue in…
Q: Consider a market with 90 firms, each firm has a short-run total cost function as follows: TC(q) =…
A: (a) TC = 5q2 Fixed cost is that part of TC which does not depends on quantity, hence constant part…
Q: Question 2: A firm faces the following cost function: C(y) = 4y2 + 10, resulting in a marginal cost…
A: C=4y2 + 10 Differentiate C w.r.t y MC = dC / dy => MC = 8y ------------------------- C=4y2 + 10…
Q: Should a firm shut firm if its revenue is R = $1,500 per week and: a. Its variable cost is VC =…
A: There are two types of cost in short run which are fixed and variable cost. The total variable cost…
Q: 2. Consider a competitive market where there are two types of firms, Type A and Type B, with total…
A:
Step by step
Solved in 5 steps
- 2. Consider a market with 90 firms, each firm has a short-run total cost function as follows: TC(q) = 5q2, and a marginal cost function: MC(q) = 10q. Market demand is given by equation Qd(p) = 200 - p. a) What is the fixed cost? Solve the average variable cost function in the short-run. b) What is the supply function of each firm? c) Solve for the short-run equilibrium outcome: P*, Q* and q*. d) What is one firm's economic profit in this market?2. Consider a market with 90 firms, each firm has a short-run total cost function as follows: TC(q) = 5q2, and a marginal cost function: MC(q) = 10q. Market demand is given by equation Qd(p) = 200 - p. a. What is the fixed cost? Solve the average variable cost function in the short-run. b. What is the supply function of each firm? c. Solve for the short-run equilibrium outcome: P*, Q* and q*. d. What is one firm's economic profit in this market? e. Consider a different market structure, where there is only one firm, interpreted as a monopolist, and then critically discuss the impact on equilibrium price and quantity. Discuss total surplus for these two types of market structures.E3 Consider a perfectly competitive firm in a short run scenario. Its total cost function is TC(q)= 4q^2 + 8. The market demand function is Q(p) = 800 - 15p, and there are 40 identical firms in the market. A. What is a firm's short-run supply function? Will it ever decide to shut down? Explain. And what is the market supply function? B. Suppose there are 40 identical firms in the market. What is the equilibrium price, p*? What is the equilibrium quantity supplied by each firm, q*? What is each firm's equilibrium profit? Will there be more entry into the market? Why? C. Repeat b, but with 80 firms this time. Label your results with superscript ** D. Repeat part b, but with 280 identical firms now. Label your results by superscript ***. Part E. Compare your results in parts b - d. Explain why the increase in the number of firms affects the results in that manner. What should happen to profit eventually as the number of firms keeps increasing? And when this happens to profit,…
- The following table gives information about a firm’s short-run cost function in a perfectly competitive industry – candy manufacturing. a) What quantity will the firm supply when price of candy is $2? When price is $5? When price is $8? b) Consider the case where price = $2. Suppose that you have been renting capital (a candy-making machine) for a long time under a long-run capital rental agreement, but now the rental contract is about to expire. Should you renew your capital rental contract or not? Explain why or why not. How would your answer change if price is $5? How would your answer change if price is $8? Quantity Total Cost Average Variable Cost Average Total Cost Marginal Cost 0 10 1 15 5 15 5 2 17 3.5 8.5 2 3 18 2.66667 6 1 4 20 2.5 5 2 5 25 3 5 5 6 33 3.83333 5.5 8(1) Consider the following cost schedule for a firm. Quantity Marginal Cost Average Total Cost Average Variable Cost 10 $12 $32 $24 15 $14 $30 $20 20 $16 $28 $16 25 $26 $26 $20 30 $30 $28 $24 35 $40 $32 $30 What is the economic profit or loss for a perfectly competitive firm if the market price is $26? A-0. B- $20. C- negative $20. D-$150. E-negative $150 (2) At what price level would a firm's short-run supply curve begin? A-The price at the minimum of the average variable cost curve B-The price at the profit-maximizing point of production C-The price at the intersection of the average total cost curve and the marginal cost curve D-The price at which demand changes from its elastic to inelastic range E-The price at which marginal cost equals marginal revenueA firm in a perfectly competitive industry has fixed costs of FC = 3 and average variable costs of AVC = 2 + 8q. a) What are the firm’s variable costs (VC)? b) What is the firm’s total cost function? c) If the price is $18, how much does the firm supply? d) Does the firm continue to supply this quantity in the short run? e) Suppose there exists a standard market demand function from consumers (downward sloping). Please provide logical discussion about how the market achieves short-run equilibrium. f) Suppose the market demand was given by Qd(p) = 50 – p. Suppose further that a sales tax of £1 per unit is imposed in the market. Calculate the deadweight loss resulting from this tax. Assume the market consists of 100 firms with identical cost functions.
- 1. Suppose marginal cost and average cost are given by the following expressions: MC(x)=3x1/2, AC(x)=2x1/2. What is the profit maximising quantity when p=$3?2. Suppose marginal cost and average cost are given by the following expressions: MC(x)=3x1/2, AC(x)=2x1/2. What is the value pf the long-run break-even price?3. For any given level of the price of output, the supply curve of a producer tells the producer the amount of output to produce in order to maximise profits a. True b. FalseA firm in a perfectly competitive industry has fixed costs of FC = 15, marginal costs of MC = 5 + 14q, and average variable costs of AVC = 5 + 7q. (a) What are the firm’s variable costs (VC)? (b) What is the firm’s total cost function? (c) If the price is $75, how much does the firm supply? (d) Does the firm continue to supply this quantity in the short-run? (e) Suppose there exists a standard market demand function from consumers (downward slopping). Please provide a logical discussion about how the market achieves short-run equilibrium.Assume that the marginal revenue equals rising marginal cost at 100 units of output. At this output level, a profit-maximizing firm's total fixed cost is $700 and its average variable costs are $5. If the price of the product is $4 per unit and the firm produces the profit-maximizing level of output, How much profit firm will earn ?
- A competitive firm has the following average cost function: AC=y2 - 8y + 30 + 5/y. The corresponding marginal cost function is MC = 3y2 - 16y + 30 a) Derive the total cost function, then find the firm’s average variable cost, average fixed cost, and fixed cost. Is this firm in the short run or the long run? How do you know? b) At what quantity is marginal cost equal to average variable cost? At what quantity is average variable cost minimized? The firm will supply zero output if the price is less than what? c) What is the smallest positive amount that the firm will ever supply at any price? At what price would the firm supply exactly 6 units of output?true/false 1- if a perfectly competitive firm shuts down in the short run, its variable cost equals zero. 2- if a perfectly competitive firm shuts dowm in the short run, its total cost equals zero.Please explain every part in details A competitive firm has the following short-run cost function: C(y) = y3 − 8y2 + 30y + 5. (a) Find the firm’s marginal cost function. (b) Find the firm’s average variable cost function. (c) Sketch graphs of the marginal cost and average variable cost functions as functions of output, y. At what point does the average variable cost curve intersect the marginal cost curve? In what intervals does the average variable cost curve decrease and increase? (d) Sketch the graph of the firm’s short-run supply function. (e) What is the shut-down price.