3. The industry producing and selling wooden pallets is comprised of 100 identical firmseach of which has a short-run total cost function given byC's = 0.5g² + 10g + 5,where q is output of (standardized) wooden pallets per day.(a) What is the equation of the short-run supply curve for each firm?(b) What is the equation of the short-run supply curve for the market as a whole?3 Suppose the demand for total wooden-pallet production is given byQ = 1 100 – 50p.(c) What will be the equilibrium in this market? What will each firm's short-run profitbe?(d) Draw an appropriate graph showing the determination of the part-(c) marketequilibrium and use it to find the associated total consumer and producer surplus.(e) Show that the total producer surplus you calculated in part (d) is equal to totalindustry short-run profit plus total industry short-run fixed cost.

We are given the Total Cost function , We know that the rising portion of the MC curve above the…

Answered: 3. The industry producing and selling…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 5CQQ

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Similar questions

Would independent trucking fit the characteristics of a perfectly competitive industry?
Do entry and exit occur in the short run, the long run, both, or neither?
11. The graph below shows the marginal revenue, marginal cost, and average total cost at different quantities for a firm in a perfectly competitive market. If this firm chooses to produce no output in the short run, what must the market price be? A-Below $20 $21-$30 $31-$40 $41-$50 Above $50 7. firm's implicit costs are $10,000, explicit costs are $5,000, and its total revenue is $10,000. This firm is earning A-normal accounting profit B-positive accounting profit of $5,000 C-positive economic profit of $5,000 D-normal economic profit E-negative accounting profit of $5,000
Using the Diagram above, answer the following questions: (c) Suppose the market price of the good in the short-run is $9 per unit. What do you know about this firm’s short-run profits, TR, TC, FC, VC, and level of production given this information? What do you predict will happen in the long-run in this market? (Hint: describe verbally, with numerical reference points, what you know about these different measures.)
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
21.The cost curves for an individual firm are given in the figure. In Figure (A), highlight the firm’s short-run supply curve. In Figure (B), highlight the firm’s long-run supply curve.
(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 revenue
The short-run market demand and supply for Kente cloth are expressed as follows: Demand: ? = 40 − 0.25? Supply: ? = 5 + 0.05? Marginal cost: −20 +4? a) The short-run level of output is ___________ metres.[1] 40.00[2] 5.05[3] 35.30[4] 20.00[5] 7.71
C. Table below shows some cost data for a perfectly competitive firm i. Is the firm operating in the short run or long run? How do you know?ii. At a market price of $32, what would be the output of the firm? Does this firm makeeconomic profit or loss at this price level? iii. If the market price is $32, would the firm shut down or keep operating? Why? iv. Based on your answer above, would firms enter or exit the market in the long run? What will happen to the market price?
5. Profit maximization and shutting down in the short run Suppose that the market for wind chimes is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. IMG 1 For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down, it will produce. (Hint: You can select the purple points [diamond symbols] on the graph to see precise information on average variable cost.) *Points on the purple line are (1, 14) (4, 10.5) (6, 10) (8, 10.5) (12, 16) (15, 24) (18, 34) IMG 2 If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's fixed cost is $44,000 per day. In other words, if it shuts down, the firm would suffer losses of $44,000 per day until…
Give typing answer with explanation and conclusion 4. Suppose the competitive firm faces a price of $50, an average variable cost of $33, and has an average fixed cost of $5. In the short-run, this firm A.cannot cover all its costs, and will have a loss per unit of $12. B.can cover all its costs, and will have a profit per unit of $12 . This is the correct answer. C.cannot cover all its costs, and will have a loss per unit of $12. D.can cover all its costs, and will have a profit per unit of $17
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.

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