Assume that a purely competitive firm has the schedule of costs given in the table below. output TFC TVC TC 0 $500 $0 $500 1 500 150 650 2 500 200 700 3 500 260 760 4 500 340 840 5 500 450 950 6 500 590 1090 7 500 770 1270 8 500 1000 1500 9 500 1290 1790 10 500 1650 2150 Indicate what output the firm would produce and its profits in the following table and transform the information of price and quantity supplied into a supply curve in a diagram. Price Quantity supplied Profit (+) or loss (−) $ 50 150 250 _____ _____

Assume that a purely competitive firm has the schedule of costs given in the table below. output TFC TVC TC 0 $500 $0 $500 1 500 150 650 2 500 200 700 3 500 260 760 4 500 340 840 5 500 450 950 6 500 590 1090 7 500 770 1270 8 500 1000 1500 9 500 1290 1790 10 500 1650 2150 Indicate what output the firm would produce and its profits in the following table and transform the information of price and quantity supplied into a supply curve in a diagram. Price Quantity supplied Profit (+) or loss (−) $ 50 150 250 _ _

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 31P: Return to Figure 9.2. Suppose P0 is 10 and P1 is 11. Suppose a new firm with the same LRAC curve as...

See similar textbooks

Similar questions

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?
Only typed answer You’ve been given a firm’s production and cost functions: p = 132 − 2q MC = 12 + 4q Assume this firm is in a perfectly competitive market. Calculate the equilibrium price and quantity. What is the firm’s profit here? Assume this firm is in a monopoly market. Calculate the equilibrium price and quantity. What is the firm’s profit here?
1. Mzanzi-Ndizvo (Pty) is a vaccine manufacturing company that has the following costs ofproduction. Cost of capital is R50 000, labour cost is R30 000, and the total cost the firm is willing to pay is R300,000. Identify the type of this production function and Illustrate it with a 2D graph. 2. If the demand and supply curve for cell phones is given by: D = 80 - 4P, S = 40 + 6P In a market with a price of P for smartphones, compute the number of phones that would be bought and sold at equilibrium.
A company is considering building a bridge across a river. The bridge would cost $2 million to build and nothing to maintain. The following table shows the company's anticipated demand over the lifetime of the bridge: Price Quantity (Dollars per crossing) (Thousands of crossings) 8 0 7 100 6 200 5 300 4 400 3 500 2 600 1 700 0 800 If the company were to build the bridge, its profit-maximizing price would be $ ? , and it ( would or would not)? produce the efficient level of output. If the company is interested in maximizing profit, it (should , or should not)? build the bridge because profit would be . (Note: If the company incurs a loss, be sure to enter a negative number for profit.) If the government were to build the bridge, it should charge a price of $ ? True or False: The government should build the bridge. True or False
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 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).
For a firm with market power, what is the marginal revenue gained when one more unit of output is sold? Question 19Answer a. The price at which the extra unit is sold plus the rise in revenue from selling other units at a higher price b. The price of the unit of output sold minus the production cost of that unit c. The price of the unit of output sold d. The price at which the extra unit is sold less the drop in revenue from selling other units at a lower price
A small firm operating in a purely competitive market has fixed costs of $45 per day compensates each employee $96 per day and has daily input and raw material costs as indicated in the table below. A. What would be the profit maximizing level of production if demand increased such that each unit sold for $130?, will the company make an economic profit producing this quantity of output? b: suppose the demand significantly decreased so that price for a unit of ouput sold to $115 each. What should the firm do? Why?
17th Assignment Consider a representative firm with total costs of TC = 16 + 1/Q ^ 2 (and a marginal cost of Q, MC = 1/2 * Q ) The market demand curve is given by P = 10 - 1/A * C and the starting market price is $2. 1) Graph the starting scenario using comparative statics. 2) Calculate any profit or loss. Why is this not a long run equilibrium? 3) What happens in order to transition to the long run? 4) Graph the long run equilibrium using comparative statics. 5) How many firms are in the market in the long run?.
c) Assume that the market price for bagel services is 42 and store produces 30 units of the bagel. Calculate theprofit level. Is the store profit maximizing? Explain your answer. d) Go back to part c) and assume that there are 100 identical bagel store in the market. Determine the market supply curve. (You will obtain total market quantity, Q, as a function of price,P). Are elasticities of individual firm supply and market supply curves different? e) Given the market supply curve you have calculated in part d), now assume that market demand forhairdressers are given by Q=2900-50P. Find the equilibrium price and quantity in the market. Does the marketequilibrium correspond to long-run equilibrium? Explain
Highest price where quantity of output is equal to zero = R1200P*= R650MC at Q*= R260AVC at Q*= R150AFC at Q*= R300Price at allocative efficient output level = R400Allocative efficient level of output = 180 unitsTotal fixed cost = R33000MC at output equal to zero = R100 1.1. Assuming profit maximising behaviour, calculate each of the following for Firm M. ATC = RQ*= unitsProfit / loss = RLerner index = Mark-up = Consumer surplus = RDeadweight-loss = RTVC = R
Squeak eClean produces commercial sanitizer used to clean tanker trucks that haul liquid food products such as milk. This sanitizer a commodity like any other and at the wholesale level, there are many domestic and foreign producers that compete vigorously. Suppose you have the following estimated market demand and supply functions for the sanitizer. Qd = 248.08 + 2.2Y - 0.6PC + 1.2 PS - 4P Qs = - 10 + 2P In these equations, Q measures output in gallons per month (in 1,000’s), P is the price per gallon of the sanitizer, Y is annual average household income (in 1,000’s), PC is an index of commodity prices, and PS is the average price per gallon of other types of sanitizer. After gathering the latest data, you find that average household income is $36,400, the current level of the commodity price index is 110.6, and the average price per gallon of other types of sanitizers is $48.50. Find the current equilibrium price and quantity in this market. Find the equilibrium price and…
The market demand and supply equations for a product of a perfectly competitive industry. Qd=60-10P Qs=30+2.5P Where Q is quantity and P is price. Required: i.What is the equlibrium price and quantity? ii.Suppose that an increase in income resulted in the new demand equation Qd=80-10P What is the new equilibrium price and quantity? Suppose the government enact a legislation that imposes a price equivalent to the original equilibrium price.What kind of price legislation is this?Explain two implications of such a price control.