70. In a perfectly competitive market, industry demand is given by Q = 1000 – 20P. The typical firm’s average cost is TC = 300 + Q2 /3, and marginal cost by MC = (2/3)Q. What is the long-run equilibrium price in this industry? A. $30 B. $20 C. $15 D. $25
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- In a competitive market, the long-run demand is given by P = 20 - (0.01)*q Firms in the industry have as their cost structure the expression C = q3 - 5q2 + 10q. Determine: (a) equilibrium price b) Quantity produced-sold of the firm. c) What quantity is traded in the market? d) Over what time period does this market work? (short or long term?) e) What is the profit of the individual firm? f) What will be the behavior of the individual firm, will it exit or stay in the market?A firm sells its product in a perfectly competitive market where other firms charge a price of $70 per unit. The firm estimates its total costs as C(Q) = 40 + 10Q + 2Q2. a. How much output should the firm produce in the short run? units b. What price should the firm charge in the short run? $ c. What are the firm’s short-run profits? $ d. What adjustments should be anticipated in the long run? multiple choice Exit will occur since these economic profits are too low. No firms will enter or exit at these profits. Entry will occur until economic profits shrink to zero.A perfectly competitive industry consists of many identical firms, each with a long-run total cost function of TC = 500Q-20Q^2+0.5Q^3. a. In long-run equilibrium, how much will each firm produce? b. What is the long-run equilibrium price? c. The industry's demand curve is ?? = 48,000 − 60?. How many firms are in the I ndustry? d. If the industry demand decreases to ?? = 30,000 − 80? how will the industry respond?
- in a perfectly competitive market with a constant cost industry, there are currently 100 identical firms, each with the total cost function TC(Q) = Q^2 + 4Q + 36. The market demand is Q = 1800 – 50p. a. What is the price at the short-run equilibrium? What is the net profit/loss of each firm at this price? b. In the long run, how many firms will enter into /exit from the market?Suppose you are managing a firm in a perfectly competitive industry. Your demand, supply and cost functions are given by: Qd = 35 – 2P ; QS = 25 + P ; and TC(Q) = C(Q) = 50 + 10Q + 2Q2 What is the equilibrium price and quantity in this market? What is your firm’s MC function? In the short run, what is the profit maximizing level of output of the firm (i.e. how much output should the firm produce in order to maximize profit)? How much profit is your firm earning, in the short-run? What adjustments should be anticipated in the long run?PROBLEM (4) The short run market supply for shirts is QS = 50P – 1000 and the market demand isQD = 2800 – 50P Let a typical firm operating in a perfectly competitive industry has short-run total cost and marginal cost curves: TC(q) = 100 + 20q + q2 and MC(q) = 20 + 2q (a) Determine the short run market equilibrium price and quantity for this type of shirt.(b) Determine how much the typical firm will produce at the equilibrium price you found in (a).(c) If all firms had the same cost structure, how many firms should be operating in this industry at the moment? (d) Calculate the profit or loss of each firm at the short-run market equilibrium. If they are making losses, why are they still producing in the short run? In the long run, will there be entry into the market or exit from it?(e) What would the price be in the long run equilibrium, assuming constant cost industry?(f) In the long run equilibrium, how many shirts would each firm produce? What would be a firm’s net profit?(g) How…
- Suppose that, in a perfectly competitive industry, every firm has total cost function TC(Q)= 5million +4Q+Q²/50,000. Demand is given by D(p) - 375,000(42-2p). (a) If the industry consists of five firms, with no possibility of entry or exit, how much does each firm produce in equilibrium? (b) What is the profit of each firm? (c) How would you answer to part (a) change if there would be a possibility of entry and/or exit? Provide a sketch of how one would solve for the equilibrium outcome.A perfectly competitive industry has a large number of potential entrants. Each firm has an identical cost structure such that long-run average cost is minimized at an output of 20 units (qi) =20. The minimum average cost is $10 per unit. Total market demand is given by ? = 1,500 − 50?a. What is the industry’s long-run supply schedule?b. What is the long-run equilibrium price (p*)? The total industry output (Q*)? The output of each firm (O*)? The number of firms? The profits of each firm? c. The short-run total cost function associated with each firm’s long-run equilibrium output is given by ?(?) = 0.5?2 − 10? + 200Calculate the short-run average and marginal cost function. At what output level does short run average cost reach a minimum? d. Calculate the short-run supply function for each firm and the industry short-run supply function.e. Suppose now that the market demand function shifts upward to Q =2,000 - 50P. Using this new demand curve, answer part (b) for the very short run…Assume a competitive industry is initially at its long-run equilibrium, given the inverse market demand and supply functions:p = 25000 − 0.2qd ??? Qs = 5000 + 0.3qsIf all firm in this market have identical cost structures:a) How many firms operate in this market at this point? b) What is the profit maximizing quantity produced by each competitive firm?
- A firm sells its product in a perfectly competitive market where other firms charge a price of $110 per unit. The firm estimates its total costs as C(Q) = 70 + 14Q + 2Q2 How much output should the firm produce in the short run? What price should the firm charge in the short run? What are the firm’s short-run profits? What adjustments should be anticipated in the long run? Calculate the new optimal quantity and price.Assume that the market determined price is $10 in a perfectly competitive industry. A firm is currently producing 100 units of output. Average total cost is $8 while marginal cost is $8 and average variable cost is $6. Is the firm producing the profit-maximizing level of output? Why or why not? If not, what should the firm do?A firm sells its product in a perfectly competitive market where other firms charge a price of $90 per unit. The firm’s total costs are C(Q) = 50 + 10Q + 2Q2. a. How much output should the firm produce in the short run? b. What price should the firm charge in the short run? c. What are the firm’s short-run profits? d. What adjustments should be anticipated in the long run