An automobile repair shop charges the competitive market price of $16 per bike repaired. The firm's short-run total cost is given by STC(Q) = Q³/3. 1. What quantity should the firm produce if it wants to maximize its profit? 2. What is the maximized profit at the optimal level of quantity and the price of $16 (round to two decimal points )? 3. Draw the shop's total revenue and total cost curves, and graph the total profit on the same diagram. Using your graph, label the point of profit-maximizing quantity and its profit level. DVL
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- Exercise-Universal Shampoo is a price taker firm. Its costs are: Output (Shampoo per hour) Total Cost ($ per hour) 0 10 1 21 2 30 3 41 4 54 5 69 a. Calculate Universal’s profit-maximizing output and economic profit if the market price is (i) $14 a shampoo. (ii) $12 a shampoo (iii) $10 a shampoo b. What is Universal’s shutdown point and its economic profit if it shuts down temporarily? c. At what price will firms with costs identical to Universal’s exit the Shampoo market in the long run? id. At what price will firms with costs identical to Universal’s enter the Shampoo market in the long run?Consider the following short-run data for a perfect competitor. Use the data to answer the following questions. Justify your answers and calculations. Quantity Demanded Price TC TVC MC 0 22 150 - 1 20 2 15 3 22 4 34 5 54 6 78 d) What is the profit maximizing level of output for this producer? e) Calculate profits or losses at all levels of output.(Figure: Price and Quantity of Output and Table I) For simplicity, assume that there are only three firms in a perfectly competitive industry; their short-run supply curves are depicted in the graph. At a market price of $40, the industry output is ____. A. 4 B. 1 C. 15 D. 9.5 Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.
- Please no written by hand solutions 9. A firm produces a product in a perfectly competitive industry and has a short-run total cost function of SRTC= 50+ 4q+2q. In the short-run, the market equilibrium price is $20 and the firm's profit maximizing quantity is_ Assuming there is no change in cost structure, in the long-run the equilibrium price changes to a. 4; $24 b. 4:$15 c. 5; $24 d. 5:$15 10. The market for sugar consists of 3,500 identical firms, each with the following short-run total cost function: SRTC-1,500+ 35q. The market demand curve for sugar is Q=11,200- 30P. What is each firm's short-run profit? a. So b. $280 c. -$1,080 d. -$1,360 e. -$1,500Suppose that a paper mill “feeds” a downstream box mill. For the downstream mill, the marginal profitability of producing boxes declines with volume. For example, the first unit of boxes increases earnings by $70, the second by $63, the third by $56, and so on, until the tenth unit increases profit by just $7. The cost the upstream mill incurs for producing enough paper (one “unit” of paper) to make one unit of boxes is $35.50. Assume the two mills operate as separate profit centers, and the paper mill sets the price of paper. It follows that the marginal profitability of boxes represents the highest price that the box division would be willing to pay the paper division for boxes.. Furthermore, assume that fixed costs are $0 for the paper mill. The following table summarizes the quantity, total revenue, and marginal costs from the perspective of the paper mill for selling paper to the box mill at various prices. In the following table, fill in the marginal revenue, total cost,…Refer to Figure 1 for questions 18-20. In Figure 1: D = Demand Curve; MR = Marginal Revenue Curve; and MC = LRATC is Marginal Cost, assumed to be equal to Long Run Average Total Cost. What is the competitive output and price for this market? Options: a) P = $3, Q = 7 b) P = $6, Q = 4 c) P = $3, Q = 4 d) P = $6, Q = 7
- 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. 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?A firm in a competitive market receives $500 in total revenue and has marginal revenue of $10. What is the average revenue, and how many units were sold? Microeconomics - MankiwPlease answer all 1. Coldwater Bicycle Company operates its factories at capacity and holds a dominant market position in its home country. When it receives a premium priced order from a new customer in another country, it must decide whether to fill that order or continue to supply the full demand in its home market. When it decided not to completely fill the new order, it incurred Group of answer choices a. Sunk costs b. Average costs c. Opportunity costs d. Marginal costs 2. What might happen if a car dealership is awarded a bonus by the manufacturer for selling a certain number of its cars monthly, but the dealership is just short of that quota near the end of the month? Group of answer choices a. Potential buyers will lose buying power at the dealer b. It may sell the remaining cars at huge discounts to hit the quota c. It creates an incentive to sell cars from different manufacturers d. It would ruin the relationship between dealer and manufacturer…
- Fruit market (a perfectly competitive market), the industry demand and supply of tomato (a homogenous product) is given by the following equations respectively: Qd = 50 − P Qs = 1 + 3P The typical firm’s total cost is given by the following equation: TC = 10 + 0.5Q2 + 5Q What is the profit maximizing level of output for the firm? How much profit is this firm earning? Show it graphically Is it short run or long run? Explain!What is the Optimum level of the output for the firm? How do you know? Explain your answer. What is the maximum price the firm can charge? At this price and output combination does the firm make economic profit of economic loss? How do you know? Explain your answer. Calculate the economic profit or loss? Show the formula you used and your calculations. What is the breakeven price? How do you know? What is the shut down price?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…