A competitive firm produces a product using the function f(x1,22) = 8 ,". The factor prices are p1 = $2.50 and p2 1/21/2 $4 and the firm can purchase as much of either factor at the given prices. What is the firm's marginal cost? O a. $1.74 O b. $1.07 O . $2.32 Od. None of the above
Q: The Supply Room, an online school supply store, grew rapidly. As a result of achieving a much larger…
A: The given statement is saying with increase in size of production, firm's production cost is…
Q: A perfect competitive firm estimates her cost function as given below: C = 100 + 5Q^2 a. What is the…
A: In a perfectly competitive market, at the optimal P = MC.
Q: Table Cost.EX2: Costs and Outputs for a Competitive Firm Total Total Output Fixed Variable (Q) Costs…
A: Answer in step 2
Q: When a firm increases its output by one unit, its average total cost (AC) decreased, this implies…
A: The cost that depicts the total cost of a product or service that is being divided by the number of…
Q: Answer the question on the basis of the following output data for a firm. Assume that the amounts of…
A: Diminishing marginal return is the concept which tells about the declining rate of increasing…
Q: If a perfectly competitive firm which produces two commodities, has the cost function C = 2Q² + 2Q?…
A: Answer: Given cost function: C=2Q12+2Q22 The Hessian matrix will be as given below:…
Q: 1. Isoquant is also called equal product curve, why?
A: Since you have asked multiple questions, we will solve the first one as per the guidelines. Please…
Q: In workout problem 2O the price of factor 1 is $8 and the price of factor 2 is $16, in what…
A: A production function expresses the relationship between the inputs of production and the output…
Q: 10. 3-4: Change in QS Versus S *3* The Kreamy Krisp Donut Company has an upward-sloping supply curve…
A: A change in supply is a shift in the entire supply curve. and this shift in supply occurs when the…
Q: A competitive firm has the following short-run cost function: c(y) = y3/3 - 10y2 +11y + 12. What is…
A: Marginal cost is the derivative of the cost function and it includes all of the costs that vary with…
Q: Suppose that wood industry is a perfectly competitive industry that involves 160 identical firms.…
A: Correct Answer: Option (a) P = 16, q = 8
Q: To maximize profit, a price taker will expand its output as long as the sale of additional units…
A: A market is a place where the buyers and the sellers interact with each other and the exchange of…
Q: Given the production and cost schedule for Laso Factory for tapes.h the market price is 8 $, how…
A: Total Profit = Total Revenue - Total Cost Total Revenue = Price * Quantity
Q: In what sense is profit a cost of production? Select one: O a. Profit levels in each industry are…
A: ‘Profit’ or ‘Economic Profit’ is the difference between the revenue earned from the production and…
Q: Use the revenue and cost functions below, to answer parts (A). (B). and (C). (C) Choose the best…
A: Profit is the difference between total revenue and total cost. Total revenue is calculated by…
Q: Suppose a firm's cost function is C(q)= 4q² + 16, where C(q) is the total cost, and q is the level…
A: (c) The total cost function is given and the marginal cost can be calculated by derivation the total…
Q: 2. Suppose that a perfectly competitive firm uses two inputs to produce one output. The conditional…
A: We will use profit maximisation and substitution methods to answer this question.
Q: TR= 20L0.25 K0.5, while L is labor and K is capital used per day. The cost of labor is $10 per day…
A: Hi! Thank you for the question As per the honor code, We’ll answer the first question since the…
Q: A firm is a price taker if it sets its O price based on the demand curve it faces own price, but…
A: Price is determined through market forces of demand and supply in perfect competition. Price is…
Q: A competitive firm’s production function is given by y= f(x1,x2)= 4x11/2 + 10x21/2 a) The price of…
A: Answer: Given, Production function: y=fx1,x2=4x112+10x212 Price of factor 1(w1)= 1 Price of factor 2…
Q: Tripod Store has been so successful in Paris that it wants to set up a new operation in Nantes.…
A: The production function of a firm shows the maximum output that a firm can produce with the given…
Q: Solve the attachment.
A: Hessian matrix is a square matrix of partial second derivatives of the cost function with respect to…
Q: If a perfectly competitive firm which produces two commodities, has the cost function C = 2Q + 2Q3…
A: A perfectly competitive market is one where firms have no option to set their product price as they…
Q: Imagine a firm in a competitive market comes up with a new production method, which halves its…
A: Considering the given information, a new production process is introduced. As a result, 1. Marginal…
Q: Consider the competitive market for titanium. Assume that, regardless of how many firms are in the…
A: Since all the firms are identical this is a perfectly competitive market. In this market, the supply…
Q: 2.4 Q7 In the theory of the firm, economist consider the total cost to be a function of the output…
A: According to the mathematical definition of the function, it is a relation which associates each…
Q: Table Cost.EX2: Costs and Outputs for a Competitive Firm Total Total Output Fixed Variable (Q) Costs…
A: Average total cost is the total production cost divided by the total quantity produced.
Q: The firm's profit maximization in the short run occurs when the TR and TC curves have the same…
A: Profit is the difference between total revenue and total cost.
Q: Consider the three figures below, depicting possible cost functions for a firm. The horizontal axis…
A: The summation of all of the costs being incurred in the production for a specific output level by a…
Q: Table Cost.EX2: Costs and Outputs for a Competitive Firm Total Total Output Fixed Variable (Q) Costs…
A: Fixed cost is the cost that remains same at all levels of output. It remains constant. Variable cost…
Q: If a perfectly competitive firm which produces two commodities, has the cost function C = 2Q? + 2Q?…
A: The provided cost function is: C=2Q12+2Q22
Q: Marginal cost is calculated as اختر أحد الخيارات .a. the increase in total cost divided by the…
A: Answer: Correct option: (b) Explanation: Marginal cost: it refers to the cost of producing an…
Q: A firm producing hockey sticks has a production function given by: q = 4LK. In the short run, the…
A: For given capital stock k = 5 we first calculate the short run production function. So, q= 4*5L =…
Q: Suppose that wood industry is a perfectly competitive industry that involves 240 identical firms.…
A: Firms in perfect competition are price takers meaning they sell output at the point where price…
Q: Consider a firm with fixed costs of production (F). Which FOUR of the following statements are…
A: To select the correct options, let's try to understand the relationship between the two curves with…
Q: QUESTION 18 The law of diminishing returns indicates that O D. beyond some point, the extra utility…
A: Marginal utility refers to extra benefits that are gained bythe consumer from consuming a particular…
Q: Assume that a firm in a competitive market faces the following cost information. If the market price…
A: Firms in perfect competition are price takers as there are a large number of firms selling identical…
Q: The demand curve for the final product is P = 40 - Q/10. The cost of Labor is WL 5. The production…
A: P=40-Q/10 Cost of Labor : wL=5 Production Function : Q=10L Marginal Revenue Product is the change…
Q: Use the figure to select all the correct statements. B Q1 Q2 Q3 Q4 Q5 Q6 DA. The distance between…
A: Answer -
Q: Problem Set 1. A firm's production function is º=50L – 0.012 , where L denotes the size of the…
A: Note: Since more than one individual questions are asked, we are going to answer the first question…
Q: If a perfectly competitive firm which produces two commodities, has the cost function C = 2Q² + 2Q…
A: The characteristics of a perfectly competitive market are as follows: (i) Large number of buyers and…
Q: Marginal cost is given by 20 + 10Q – 12Q². Fixed cost is 100. What is the average cost? 100 3Q? +…
A: Marginal cost is the additional cost incurred on the production of one extra unit of output. Average…
Q: Imagine a firm in a competitive market comes up with a new production method, which halves its…
A: In a competitive market, when the marginal cost falls by halves then it implies that the firm has…
Q: The law of diminishing returns indicates that O A. the demand for goods B. because of economies and…
A: The production of various goods and services by the producers involve the use of inputs, or…
Q: Table) Based on the table, what is the average total product when John's Salsa Company hires three…
A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Consider a company that operates in a competitive market, with a typical set of cost curves…
A: TFC=27×180=4860When P=50,Average Fixed Cost= Total Fixed CostTotal OutputAverage Fixed…
Q: A firm producing hockey sticks has a production function given by: q = 2LK. In the short run, the…
A: Total variable cost (TVC): - it is the total value of the cost incurred in the employment of…
Q: When making a choice between factor inputs such as labor or equipment, or between two different…
A: In a market, firms have various alternatives input resources to choose.
Q: Suppose a firm's cost function is C(q) = 4q² + 16, where C(q) is the total cost, and q is the level…
A: A Firm's cost function is given as- C(q) = 4q2 + 16, where C(q) is the total cost, and q is the…
Step by step
Solved in 4 steps with 3 images
- A competitive firm produces a product using the function f(x1,x2)=8x1/21x1/22f(x1,x2)=8x11/2x21/2. The factor prices are p1=$2.50p1=$2.50 and p2=$4p2=$4 and the firm can purchase as much of either factor at the given prices. What is the firm's marginal cost? a. None of the above b. ≈$1.07 c. ≈$2.32 d. ≈$1.74To maximize profit, a price taker will expand its output as long as the sale of additional units adds more to revenues (marginal revenues) than to costs (marginal costs). Therefore, the profit-maximizing price taker will produce the output level at which marginal revenue (and price) equals marginal cost. In a price-taker market, if a business produces efficiently (i.e., that is, where marginal revenues = marginal costs), the firm will be able to make at least a normal profit. True of False. ExplainTo maximize profit, a price taker will expand its output as long as the sale of additional units adds more to revenues (marginal revenues) than to costs (marginal costs). Therefore, the profit-maximizing price taker will produce the output level at which marginal revenue (and price) equals marginal cost. In a price-taker market, if a business produces efficiently (i.e., that is, where marginal revenues = marginal costs), the firm will be able to make at least a normal profit. True of False. Explain. All firms produce where MR=MC. Price takers produce and price where P=ATC=MC=MR. That is the "normal profit" level. Profits above that level are considered "economic profits." Review economic profits, normal profits, explicit costs, and implicit costs.
- Modified True or False: State whether each statement is true or false. If the statement is false, briefly explain why it is so, and then restate it to make it true. The shapes of long-run cost curves follow directly from the assumption of a fixed factor of production, which implies diminishing returns. The optimal scale of plant is the scale of plant that maximizes average cost. In the long-run competitive equilibrium, each individual firm chooses a scale of operations that minimizes its long-run average cost. Answer correctly and explain within 30mins will give you positive feedback.Q)Assume that a competitive firm has the total cost function: TC=1q^3−40q^2+740q+1600 Suppose the price of the firm's output (sold in integer units) is $650 per unit. Create tables (but do not use calculus) with columns representing cost, revenue, and profit to find a solution. A. How many units should the firm produce to maximize profit? B. What is the total profit at the optimal output level? Please specify your answer as an integer.Consider a company that operates in a competitive market, with a typical set of cost curves (Marginal Cost, Average Variable Cost, Average Fixed Cost and Average Cost with typical formats of Microeconomics theory). Consider further that Marginal Costs coincide with Average Total Costs when the firm's output is 200 units of output, at a market price of 50. If market prices fall to 40, the company will produce 180 units of product to maximize its profit. If at this point the Average Fixed Costs per unit of output equals 27 per unit of output, what are your recommendations for this company in the short term? And in the long run?
- A purely competitive firm has a single variable input L (labor), with the wage rate W0 per period. Its fixed inputs cost the firm a total of F dollars per period. The price of the product is P0. (a) write the production function, revenue function, cost function, and profit function of the firm. (b) What is the first-order condition for profit maximization? Give this condition an economic interpretation. (c) What economic circumstances would ensure that profit is maximized rather thatn minimized?The manager of Don Teeta Company Limited hires labour (L) and rents capital equipment (K) ina very competitive market. Currently, the wage rate of labour is GH¢2 per hour and capital isrented at GH¢5 per hour, the unit price of the product is GH¢0.75 and total cost of production isGH¢1,000. Suppose the firm’s production function (Q) is as follows:? = 14?0.5?0.5 + 10Determine the optimal input usage and the maximum profit.Suppose that the firm’s demand curve indicates that at a price of $10 per unit, customers will demand 2 million units of its product. Suppose that management decides to pick both price and output; the firm produces 3 million units of its product and prices them at $18 each. What will happen?
- You are the manager of a firm that sells a “commodity” in a market that resembles perfect competition, and your cost function is C(Q) = 2Q + 3Q2. Unfortunately, due to production lags, you must make your output decision prior to knowing for certain the price that will prevail in the market. You believe that there is a 70 percent chance the market price will be $200 and a 30 percent chance it will be $600.a. Calculate the expected market price.$ b. What ouptut should you produce in order to maximize expected profits?unitsc. What are your expected profits?$A competitive firm’s production function is given by y= f(x1,x2)= 4x11/2 + 10x21/2 a) The price of factor 1 is 1, the price of factor 2 is 1, and the price of output is 2. Find the profit-maximizing quantities of x1 and x2? What is the profit-maximizing quantity of output? b) Redo part (a), this time by first deriving the firm’s factor demand functions and the supply function, and then substituting the prices in these functions.Under what condition will a competitive firm necessarily shut down its operations? What does this imply regarding the shape of the firm's short run supply curve? Use this condition to determine the short run supply curve of the firm uses Labour (L) and Capital (K) to produce commodity (Y). Assuming that the wage rate is Rs. 340/- and the rental rate on capital is Rs. 0.5/-. The quantities of the inputs and outputs are shown in the table below. L 0 1 2 3 4 5 6 7 8 9 10 K 90 90 90 90 90 90 90 90 90 90 90 Y 0 100 250 420 560 675 760 820 860 885 900
