A company that works in a perfectly competitive market has a total cost function: TC = Q3 - 36Q2 + 540Q + 600 The supply and demand functions in that market are: QS = 5P -500 Qd = 4,000 -10P b) Find what benefit you will get d) Represent graphically the market equilibrium and that of the company, including the closing point e) Locate the rectangle that represents profits on the company's equilibrium graph. Calculate your área considering the values taken by the base and the height. Validate that it reaches the same result (or very close) to the one obtained in part b).
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1.- A company that works in a
TC = Q3 - 36Q2 + 540Q + 600
The supply and demand functions in that market are:
QS = 5P -500
Qd = 4,000 -10P
b) Find what benefit you will get
d) Represent graphically the
e) Locate the rectangle that represents profits on the company's equilibrium graph. Calculate your área considering the values taken by the base and the height. Validate that it reaches the same result (or very close) to the one obtained in part b).
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- Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + q2 Marginal cost: MC = q where q is an individual firms quantity produced. The market demand curve for this product is Demand:QD = 120 P where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market. a. What is each firms fixed cost? What is its variable cost? Give the equation for average total cost. b. Graph average-total-cost curve and the marginal-cost curve for q from 5 to 15. At what quantity is average-total-cost curve at its minimum? What is marginal cost and average total cost at that quantity? c Give the equation for each firms supply curve. d. Give the equation for the market supply curve for the short run in which the number of firms is fixed. e. What is the equilibrium price and quantity for this market in the short run? f. In this equilibrium, how much does each firm produce? Calculate each firms profit or loss. Is there incentive for firms to enter or exit? g. In the long run with free entry and exit, what is the equilibrium price and quantity in this market? h. In this long-run equilibrium, how much does each firm produce? How many firms are in the market?1.- A company that works in a perfectly competitive market has a total cost function: TC = Q3 - 36Q2 + 540Q + 600 The supply and demand functions in that market are: QS = 5P -500 Qd = 4,000 -10P a) How much should you produce to maximize your profits? b) Find what benefit you will get c) Calculate the closing point for the company d) Represent graphically the market equilibrium and that of the company, including the closing point e) Locate the rectangle that represents profits on the company's equilibrium graph. Calculate your área considering the values taken by the base and the height. Validate that it reaches the same result (or very close) to the one obtained in part b).17.A perfectly competitive firm has the following total cost function: TC = 4,500 + 2q + .0005q2 where TC is total cost in dollars and q is the quantity of output produced. a. Assume this perfectly competitive market consists of 800 firms with cost structures identical to the one above. What is the equation for the market supply curve? Assume the market demand curve is: Qd = 5,600,000 – 400,000P where Qd is the quantity demanded in the market and P is the commodity’s price in dollars. b. What is the market’s equilibrium price? c. Assuming the market is in equilibrium, using marginal revenue and marginal cost determine the firm’s profit-maximizing quantity of output? What does the profit-maximizing firm’s total economic profit equal? Assume the total cost function above: TC = 4,500 + 2q + .0005q2 is associated with the short-run total cost function that corresponds to the minimum point on the long-run average total cost curve and this is a constant cost industry. d. What would the…
- 26.A firm operates in a perfectly competitive market and is producing at the profit-maximizing output. It is incurring economic losses. Based on this information, which of the following is true? A-Average total cost = price; marginal cost > marginal revenue. B-Average total cost = price; marginal cost = marginal revenue C-Average total cost > price; marginal cost = marginal revenue D-Average total cost > price; marginal cost > marginal revenue E-Average total cost < price; marginal cost > marginal revenue 27.In the short run, a price-taking firm decides to produce zero units of output. Which of the following must have been the case? A-The market price was less than the firm's average variable cost. B-The firm was earning normal profits in the short run but projected economic losses in the long run. C-The firm's average total cost was higher than its average revenue. D-The market price was between the firm's average variable cost and average total cost. E-The…17. A market is in long-run equilibrium and firms in this market have identical cost structures. Suppose demand in this market decreases. a. Describe what happens to the profit-maximizing output quantity for individual firms as the market leaves and then returns to long-run equilibrium. b. Describe what happens to the market quantity as the market leaves and then returns to long-run equilibrium.2.- A company that works in a perfectly competitive market has a total cost function: TC = Q3 - 52.5Q2 + 1,050Q + 6,750 The supply and demand functions in that market are: QS = 2P -704 Qd = 5,260 - 5P a) How much should you produce to maximize your profits? b) Find what benefit you will get c) Represent graphically the market equilibrium and that of the company. d) Calculate the market consumer surplus. e) Validate the utilities by calculating them as the area of the rectangle on the graph.
- (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 revenue7. Short-run supply and long-run equilibrium Consider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. The following diagram shows the market demand for copper. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 10 firms in the market. (Hint: You can disregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 15 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 20 firms. If there were 20 firms in this market, the short-run equilibrium price of copper would be ___ per…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 ?
- 1. A firm in a perfectly competitive industry has fixed costs of FC = 15, marginal costsof MC = 5 + 14q, and average variable costs of AVC = 5 + 7q.(a) If the price is $75, how much does the firm supply? (b) Does the firm continue to supply this quantity in the short-run? (c) Suppose there exists a standard market demand function from consumers(downward slopping). Please provide a logical discussion about how the marketachieves short-run equilibrium.1. The manufacturers of printers are operating in a perfectly competitive market. Each printer sold for $150. Suppose that the cost to produce each of printers initially shows a short span of decreasing marginal costs, followed by an increase in the marginal costs. a. Draw a possible total cost curve for producing printers. For a given quantity (Q) (placed at any location you choose on the horizontal axis), show the corresponding profit. b. Draw the possible marginal cost curve for printer production. Indicate the maximum output level of profit.1. Draw the following for a firm in a competitive industry. Assume that the firm faces diminishing marginal product at some point. Remember to label all curves and axes. a. Fixed cost and average fixed cost. b. Marginal cost c. Average variable cost and average total cost. d. Identify the price ranges that will induce entry, exit and shutdown assuming all firms face identical cost curves. e. Assuming firms are producing at minimum efficient scale, draw the industry long run supply curve in parallel with or in reference to the firm level curves from above. 2. A major proposed industry in the future is the provision of global satellite wifi. However, the actual willingness to pay for such a service is unknown. Assume there's a 40% chance that there are 1 billion people willing to pay $100/year for a service that would cost $60/year to provide and a 60% chance that those people would be willing to pay $10/year for a service that would cost $60/year to provide. Assume that the enterprise…
