3. Assume a firm is facing the market demand curve: q = 100-2p, its total cost function is: c(q) = 2q². a. What is the firm's marginal revenue? b. What is the firm's marginal cost? c. What is the output level "q" when the firm is maximizing its profit? d. What is the firm's maximum profit?
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A:
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- Question 7 A firm, focusing on producing toothpaste has a demand function 2? = 10 − 0.25?. If fixed cost per unit is -(+ and variable cost per unit function is 2? − 20 + -)), where Q is number of toothpastes produced and P is the price per toothpaste: a) Determine the number of toothpastes that maximizes the company’s profit. b) How much should the firm charge for one toothpaste? c) Find the total profit at the profit maximizing level of output. d) Using the own price elasticity of demand, comment on the firm's pricing policy options.Part A. When the demand curve is given by P1 = $30, and the firm behaves optimally in the short run, what is the total revenue? A. $ 900 B. $1350 C. $800 D. $2400 Part B. When the demand curve is given by P1 = $30, how much profit is this producer earning? A. $ 500 B. $ 800 C. $ 1200 D. $ 1600 Part C. Does the graph above represent the firm’s short run equilibrium or long run equilibrium, for a given price? A. short run B. long run C. short run or long run D. neither short run nor long runSolve for the following questions: a. what is the marginal revenue when the firm increases output from 4 to 5? b. what is the marginal revenue when the firm increases the output from 5 to 6? c. what is the marginal cost when the firm increases the output from 4 to 5?
- Question 23 A competitive firm has a total cost function in dollars of the form C(q)= 100–4q + q^2, where q is output. Suppose the market price is $10 per unit of output. What is the firm’s short run point elasticity of supply? a) 20/7 b) 5/7 c) 10/7 d) 0.5 e) 2Suppose a firm is operating in a competitive market and is maximizing profit by producing at thepoint where marginal revenue 5 marginal cost.Now suppose that consumer wealth decreasesin this market (and the good is a normal good).What might you expect to happen to the profitmaximizing output quantity for the firm?How much should the firm produce to maximize its profit? What is the firms AR? What is the firms MR? How much is the firms total revenue based on the profit maximization rule? How much is the firms total cost? How much is the firms total profit?
- A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue of $10, average total cost of $8, and fixed cost of $200. What is its profit? What is its marginal cost? What is its average variable cost?A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue of $10, average total cost of $8, and fixed cost of $200.\a. What is its profit?b. What is its marginal cost?c. What is its average variable cost?d. Is the efficient scale of the firm more than, less than, or exactly 100 units?Suppose the competitive market price is $60, and a competitive firm’s total costs = q^2 - 6q + 990 and marginal cost = 2q - 6. a. Solve for the profit-maximizing (or loss minimizing) quantity (q*). b. What is the market equilibrium price? c. Should the competitive firm produce q*? Explain why using one of the four key questions and solutions. d. Does the competitive firm make a profit? Explain why using one of the four key questions and solutions. e. How much profit (or loss) does the competitive firm make?
- At its current level of production a profit-maximizing firm in a competitive market receives $15 for each unit it produces, and faces an average cost of $10. At the market price of $15, the firm’s marginal cost curve crosses the marginal revenue curve at an output level of 1,000 units. A. Draw a diagram that depicts the typical firm in this market. B. What is the firm’s current profit? C. What changes are likely to occur in this market and why?31) What is total fixed cost at the profit-maximizing quantity? 32) When the process of entry and exit has ended in a competitive market, are firms’ profits positive, negative, or zero? Why is this true? 33) When a single firm can supply a good or service to an entire market at a lower cost than could two or more firms, the industry is known as a?Describe the difference between average revenue and marginal revenue. Why are both of these revenue measures important to a profit-maximizing firm? Explain how a firm in a competitive market identifies the profit-maximizing level of production. When should the firm raise production, and when should the firm lower production?