Don't answer by pen paper 4. Suppose the market price in a perfectly competitive market is $100. If a firm has a total cost function ofTC = 0.00002 Q³ -0.02 Q² + 400 Q + 50000(a) Calculate the firm's optimal output level.(b) What would the firm's short-run profit be?

Optimal output level of a firms in perfect competition is achieved at the point where price is equal…

Answered: 4. Suppose the market price in a…

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 4CQQ

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9 Suppose that a perfectly competitive industry consists of 240 firms and fixed cost of an individual firm is 384 half of which is a sunk fixed cost while the average variable cost is 12q. Market demand is given by Q-1440-10P. Find the equilibrium output and profit, respectively
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1. Consider a typical perfectly competitive firm with an increasing MC curve. At the current output, the market price is $8, while the MC is $6, the AVC is $5, and the AC is $10. Hence, the firm can likely increase its profit in the short run by... increasing price. reducing output (Q). reducing the price. shutting down production. increasing output (Q). 2. Which of the following is true in the long run equilibrium of a perfectly competitive market? price (P) < average variable cost (AVC) price (P) = 0 price (P) > marginal cost (MC) price (P) = average cost (AC)

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4. Suppose the market price in a perfectly competitive market is $100. If a firm has a total cost function a TC = 0.00002 Q³-0.02 Q² + 400 Q + 50000 (a) Calculate the firm's optimal output level.