competitive industry. The market demand function is 's cost function is c(q) = ¿q². The government prov es>0 for firms to help them get through the difficul the firm earns (1+ s) p for each unit of goods sold. as strictly increases with s.
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- Assume the demand function for a product is given by QD = 20,000 – 10P + 0.4I, where P = price of the product, and I = average income of consumers. Also, assume the supply function of the product is given by QS = 30P. If the market for the product is perfectly competitive, and the average income of consumers is $10,000, what are the equilibrium price and quantity in this market?Only typed answer Each firm in a competitive market has a cost function of C(q) = q − q 2 + q 3 . The market has an unlimited number of potential firms. The market demand function is Q = 24 − P. a. Determine the long-run equilibrium price, the quantity per firm, the market quantity, and the number of the firms. b. How do these values change if a tax of $1 per unit is collected from each firm? c. How would these values change if instead of a tax the government implements a price floor of 30?Suppose that all firms in a constant-cost industry have the following long-run cost curve:c(q) = 4q2 + 100q + 100The demand in this market is given by QD = 1280 - 2p. Suppose the number of firms in the market is restricted to 80a. Derive the supply curve with this restriction. Find the market equilibrium price and quantity with the restriction.b. If firms are allowed to buy and sell these permits in an open market, what will be the rental price of permits? Will firm’s that own permits make profit? Briefly explain.c. How much deadweight loss is generated by the permit system? Provide a graph showing the region of this deadweight loss.d. Suppose the government abandons the permit system and simply imposes a fixed fee on firms in the market. If the fee is set equal to the permit price you found in c., what will be the equilibrium price, quantity, number of firms and deadweight loss?
- What is the effect on the short-run equilibrium of a specific subsidy of s per unit that is given to all n firms in a market?Given that the demand function P = 15 - 0.25Q and the supply function P = 0.2Q + 6. Determine:a. Market equilibrium price and quantityb. The size of the consumer surplusc. The amount of the producer surplus.1. A firm’s demand function is: Qd = 800 – P/3. The firm’s supply function is: Qs = P/2 – 200. If the government imposes a price floor $1,500, what is the deadweight loss? Group of answer choices $22,000 $25,000 $28,000 $36,000 $44,000
- Suppose that the inverse demand for a downstream firm is P = 150 - Q. Its upstream division produces a critical input with costs of CU(Qd) = 5(Qd)2. The downstream firm's cost is Cd(Q) = 10Q. When there is no external market for the downstream firm's critical input, the downstream firm should produce:A Los Angeles firm uses a single input to produce a recreational commodity according to a production function f(x)=4x1/2, where x is the number of units of input. The price of the commodity is $100 per unit, and the input cost is $50 per unit. The fixed costs are zero. A: Write down the firm’s profit function. C:Find the profit maximizing amounts of input and output. What is the maximum profit? C:Suppose that the firm is taxed at $20 per unit of its output (note it is a quantity tax) and the price of its input is subsidized by $10 per unit. What is the new input and output levels? What is the new maximal profit?A market consists of a dominant firm and a number of fringe firms. The followings are the information about these firms. Total market demand: QALL=300 – (2.5) P The competitive fringe supply function (total): QF=2P-12 The dominant firms marginal cost function: MC = 12 + (1⁄2)QD. a) What is the equilibrium price set by the dominant firm? Calculate the total market demand at the price found. b) How much will the competitive fringe supply to the market at the price found in question 2(a)? c) How much will the dominant firm supply to the market at the price found in question 2(a)? d) Show the above answers graphically.
- 1. The market demand function of a perfectly competitive market is Q=500-p, and the cost function of an individual company is C(q)=q^3-20q^2+110q. Suppose that the government imposes a tax of 10 per unit of transaction on companies. In the long-term equilibrium, find K-L when you indicate the number of companies as L and the market price as K. Find W1 - W2, W1 is when no tax is imposed, and W2 is when the government imposes a tax of 10 per unit of transaction on an enterprise.A firm has the following total costs, where Q is output and TC is total cost: QTC0$ 1001110213031604200525063107380846095501065011760 Say the firm is in a perfectly competitive market. If the current market (equilibrium) price is $ 70, at what output level will the firm as a profit maximizer produce at? Say the market price rises to $ 100. At what output level (as a perfect competitor) will this produce at? How much profit is the firm making at a price of $90? Based on this calculation, do you expect firms to enter or leave this market? Say instead this firm is a monopoly. If the firm maximizes profit at an output level where marginal revenue equals $ 80, what output level will this be?Assume that the total demand is Q = 50 – 0.5P (or P = 100 – 2Q)\\nAssume further that the demand function of segmented markets are given as follows:\\n?1 = 32 – 0.4?1\\n?2 = 18 – 0.1?2\\nNote: Q = ?1 + ?2\\nAssume that the cost function is C = 50 + 40Q\\n(a) Find out the profit maximizing levels of output (?1 and ?2).\\n(b) What are the corresponding prices?\\n(c) What is the total profit of this price discriminating Monopolist?\\n(d) What are the price elasticities of demand in these two markets?\\n(e) Based on the price elasticities, which market will charge a higher price and why?\\n(f) Compare the profit of this price discriminating Monopolist with the profit of the simple Monopolist. Interpret your results