20) - Google Chrome"mod/quiz/attempt.php?attempt%3=1579003&cmid%3812962&page%3D2em (Academic20-MCATCAVC164.5 10 15 20 25 30 35 40 45 50Quantity (units per day)The above figure shows the cost curves for a perfectly competitive firm. If all firms in the market have thsame cost curves and the price equals $16 per unitSelect one:O a. over time, the price will fall as new firms enter the market.O b. over time, firms will leave this market.O c. the market is in its long-run equilibrium.O d. the firm is making zero economic profit.o searchhpPrice and cost (dollars per unit)

A perfect competition is a market structure in which many vendors and buyers are present. In this…

·20아 MC ATC AVC 16 12 8. 5 10 15 2O 25 30 35 40 45 50 Quantity (units per day) The above figure shows the cost curves for a perfectly competitive firm. If all firms in the market have same cost curves and the price equals $16 per unit Select one: O a. over time, the price will fall as new firms enter the market. O b. over time, firms will leave this market. O c. the market is in its long-run equilibrium. O d. the firm is making zero economic profit. Price and cost (dollars per unit)

·20아 MC ATC AVC 16 12 8. 5 10 15 2O 25 30 35 40 45 50 Quantity (units per day) The above figure shows the cost curves for a perfectly competitive firm. If all firms in the market have same cost curves and the price equals $16 per unit Select one: O a. over time, the price will fall as new firms enter the market. O b. over time, firms will leave this market. O c. the market is in its long-run equilibrium. O d. the firm is making zero economic profit. Price and cost (dollars per unit)

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter19: Externalities And Public Goods

Section: Chapter Questions

Problem 19.1P: A firm in a perfectly competitive industry has patented a newprocess for making widgets. The new...

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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.
Q2.The management of an ‘Electronic Goods’ manufacturing company asked you to give an advice about changing its current production plan, given the following information:- Annual production plan of computers is 4200 computers.- Total cost of production is OMR 824000.- Fixed cost is OMR 320000.- Revenue function: R = 460.2Q – 0.05Q2 1-Use the above information to formulate the price function and the total cost function, and determine the following: 1) Profit-maximizing quantity.2) Profit-maximizing price.3) Maximum profit value.4) Revenue-maximizing quantity. 2-Should the company change its current annual production plan of computers in order to maximize its profit?
Question 1 . In 2004, the country of Lesotho in southern Africa made most of its export earnings, 90% in 2004, from garment and textile factories. Many of these clothing items, particularly t-shirts, were sold in the U.S. Sub Question a. Assume that the market for cotton textiles is perfectly competitive. Assume, also, that the market price for a t-shirt is $3 and the marginal cost function for a typical Lesotho textile factory is MC = .5 + .1Q (Q is in 1000’s of t-shirts). Solve for Q, the output of a typical Lesotho factory. Using a graph, illustrate the long run equilibrium for this Lesotho garment factory in 2004 (hint: you will need to graph the above two functions plus a hypothetical (but plausible) ATC function). Sub Question b. At the beginning of 2005, the U.S. ended textile quotas from China. This made it much easier for the U.S. to import inexpensive textiles, such as t-shirts, from China. Using S&D analysis, illustrate how the end of textile quotas on China would impact…
Rasiah's Garden of fruit is a firm selling fruits in a perfectly competitive market. Total fixed cost is RM50, and the wage for labour is RM5 per worker. The estimated output produced and cost are as follows: Labour Output (Kg of fruits) usage 0. 0. 8. 10 12 20 17 30 24 40 33 50 44 60 57 70 Calculate the total variable cost, average total cost, average variable cost, marginal cost, total revenue and marginal revenue. b. If Rasiah's garden of Fruits sells a kilo of fruit for RM3.50, how many Kg of fruit (output) should the firm sell in order to maximise profits, and how much profits would the firm make?
Consider the perfectly competitive market for titanium. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost ( MCMC ), average total cost ( ATCATC ), and average variable cost ( AVCAVC ) curves shown on the following graph
Q23 Suppose a perfectly competitive firm is currently operating with the following information: Output = 1500 tonnesAverage total cost = $627 per tonneAverage variable cost = $614 per tonneMarginal revenue = $620 per tonneMarginal cost = $620 per tonneAt the current level of output, this firm is _____ profit and is an earning economic profit of _____. a. Maximising; -$10500. b. Not maximising; -$10500. c. Maximising; $10500. d. Maximising; $9000. e. Not maximising; -$9000.
17.Mr.Ying is starting a telephone company. The marginal cost for each cell phone is given by the equation C(x) = 0.01x^2 − 3x + 229. x is the number of cell phones manufactured and sold. The marginal revenue function is R(x) = 429 − 2x. Both C(x) and R(x) are given in dollars. part a) Where do these curves intersect? What do those intersection mean? part b) Find the area between the curves, using end points that are reasonable. Round to the nearest cent. part c) What does the area under the curve mean in this scenario?
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 ?
Douglas Fur is a small manufacturer of fake-fur boots in New York City. The following table shows the company’s total cost of production at various production quantities.
4. Assess which of the following is true and which is false.A firm’s profit equation is given by π = -100 + 160Q – 20Q2. Therefore,a) The firm’s fixed cost is 100.b) The firm’s fixed cost is 40 and variable cost is 20.c) Marginal profit is Mπ = 160 – 20Q.d) The firm’s profit-maximizing output is Q = 4.e) Marginal profit is Mπ = 160 – 40Q and it is positive for quantities that are lower than theprofit-maximizing quantity.
Suppose that the total cost function of a firm is given as follows; TC = 500 + 2Q2 And the price of the firms product is determined by the market equilibrium at $100. a) set the profit maximizing condition. Find the profit maximizing output level for the 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.
Zelda’s Zippers, a purely competitive firm currently producing 50 units of output earns marginal revenues of $30 from each extra unit of output it sells. If it sells 60 units, then the product price would be A) $60B) $30C) $2D) indeterminate based on the information given.