A competitive firm has following SHORT RUN cost function: C = 4 + 2q3- 4q2 + 20q Answer: (a) Obtain in a table average total cost (ATC), average variable (AVC) and marginal costs (MC). Plot on a graph b) In what price interval will firm offer zero output? Identify on your graph c) Identify the supply curve in graph d) At what price will firm offer exactly 8 units?

A competitive firm has following SHORT RUN cost function: C = 4 + 2q3- 4q2 + 20q Answer: (a) Obtain in a table average total cost (ATC), average variable (AVC) and marginal costs (MC). Plot on a graph b) In what price interval will firm offer zero output? Identify on your graph c) Identify the supply curve in graph d) At what price will firm offer exactly 8 units?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

ChapterB: Differential Calculus Techniques In Management

Section: Chapter Questions

Problem 5E

See similar textbooks

Similar questions

Bitcom, a manufacturer of electronics, estimates the following relation between marginal cost of production and monthly output: MC= $150+ 0.005Q What does this function imply about the effect of the law of diminishing returns on Bitcom’s short-run cost function? Calculate the marginal cost of production at 1,500, 2,000, and 3,500 units of output. Assume Bitcom operates as a price taker in a competitive market. What is this firm’s profit-maximizing level of output if the market price is $175? Compute Bitcom’s short-run supply curve for its product. Provide a 100 word summary of how this can be applied to the current economy. Show Calculations and can it be done in Excel?
Suppose a firm operating in a perfectly competitive industry has costs in the short run given by: SRTC = 8 + ½q^2 and therefore MC = q. Assuming that the firm is a price-taker operating in a competitive market, derive an expression for the firm’s supply curve, (the profit maximizing output for the firm as a function of the market price, i.e., q^s = f(p). Assuming the firm is one of 100 identical firms in the industry, what is the short-run supply curve for the industry, i.e., Q^s = f(p)? If demand is given by Q^D = 1000 – 100p, what are the short-run equilibrium price, market quantity, and firm quantity? Is this a long-run equilibrium? [Hint: Calculate firm profit in the equilibrium.]
The market price a perfectly competitive firm has to take is pm and the total cost to the firm is TC(Q)=aq+Bq2 +y , where y is fixed cost of the firm . Find the optimal output to the firm in terms of market price pm. Express also maximum profit. How does maximum profit depend on the market price and the level of fixed cost? All parameters are assumed to be positive.?
Assume the following cost data are for a purely competitive producer: Explain: “That segment of a competitive firm’s marginal cost curve that lies above its average-variable-cost curve constitutes the short-run supply curve for the firm.” Illustrate graphically. How does this curve relate to the law of diminishing returns (Chapter 6)?
If a firm's total cost function is c(q) = 100 + 10 q – q2 +0.1 q3, then (a). what is the firm's shut down price? (b). If the firm is operating under perfect competitive market, derive the firm’s short run supply function.
Multiplying one firm’s short-run supply function to the number of firms in a specified industry will give you the short-run market supply function. True or false.
A firm has a linear demand function for it's product.When the price of the product is sh.20,the quantity demanded is 40 units.When the price increases to sh.240 the quantity demanded becomes 30 units.In addition,the firm's marginal cost function is giving by: Mc = 40q- 2q^2+2 Fixed cost = 5 million Where q= quantity demanded,Mc = marginal cost(sh.million) Required 1.The level of output that maximises profits 2.The maximum profit 3.The price of the product at the maximum profit
Suppose the (inverse) demand for a firm’s product is given by P = 10−2Q and the cost function is C(Q) = 2Q What is the profit-maximizing level of output and price for this firm?
[This question concerns long-run equilibrium so all variables in the questions are long-run.]Suppose Firm X has a cost function C(q) = q3 - 20q2 + 150q,from which we can derive its average cost function and marginal cost function as: AC(q) = q2 – 20q + 150, MC(q) = 3q2 – 40q +150. In each of the following 3 questions, you are given 2 statements—a price/quantity information and a market structure. In each question, determine and explain whether the 2 statements are consistent with each other. The long-runpriceis $73 and Firm X produces 11units. Firm X is in a perfectly competitive industry The long-run price is $73 and Firm X produces 11 units. Firm X is in a competitive selection industry. The long-run price is $75 and Firm X produces 5units. Firm X is in a monopolistically competitive industry.
A perfectly competitive firm’s short-run total cost curve is C(q)= 100q-4q2+0.2q3+450. What is the firm’s short-run supply curve? Determine also the output level over which the short-run supply curve is defined. How much output will the firm supply if price, p=75?
Assuming fixed costs are unavoidable in the short run, a perfectly competitive firm’s short run supply curve is the portion of Group of answer choices a) its MC curve that lies above its average total cost curve. b) its average variable cost curve that lies below its average total cost curve. c) its MC curve that lies above its average variable cost curve. d) its average variable cost curve that lies above its average total cost curve.
a perfect competitive firms has the following total cost function: total output : 0 1 2 3 4 5 6 7 total cost : 20 30 42 55 69 84 100 117 how much will the firm produce if the price of the production the market is RS. 14 per unit? how will it change its output if price rises to RS. 16 per unit?