Consider a competitive industry with a large number of firms, all of which have identical cost functions c(y) = y^2 + 1 for y > 0 and c(0) = 0. Suppose that initially the demand curve for this industry is given by D(p) = 52 − p. If there are n number of firms , what is the industry supply curve?
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Consider a competitive industry with a large number of firms, all of
which have identical cost functions c(y) = y^2 + 1 for y > 0 and c(0) = 0. Suppose
that initially the demand curve for this industry is given by D(p) = 52 − p.
If there are n number of firms , what is the industry supply curve?
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- Consider a competitive industry with a large number of firms, all ofwhich have identical cost functions c(y) = y2 + 1 for y > 0 and c(0) = 0. Supposethat initially the demand curve for this industry is given by D(p) = 52 − p.(a) What is the supply curve of an individual firm?(b) If there are n number of firms, what is the industry supply curve?(c) What is the smallest price at which the product can be sold?(d) Based on your answers to parts (a)-(c), explain in detail theequilibrium points based on the market activity with respect to the price, firmand industry.If the demand function faced by a firm is:Q = 90 – 2PTC = 2 + 57Q – 8Q2 + Q3 Determine the best level of output for the above question by the MR and MCapproach.Question 2: Determine the best level of output for a perfectly competitive firm that sells its product at P = $4 and faces TC = 0.04Q3– 0.9Q2 + 10Q + 5. Will the firm produce this level ofoutput? Why? Question 3: Suppose that the production function is given as follows:TPL = 10L + 5L2 + L3Find the total product, Marginal product and average product when L = 5. Question 4: Find the optimum level of output and profit from the cost functionTC = 50 + 6Q2 and price P = 100 – 4QAlso derive marginal cost and marginal revenue.Assume that there is a perfectly competitive industry with a market demand curve given by: " P = 100-0.5Q " where P is the market price and Q is the industry wide output. All firms in this industry are identical and that a representative firm's total cost is " TC = 100+5q+q2", where q is the output of the individual firm. a) In this industry, what is the market price that would prevail in the long run? (Round your answer to two decimal places.) b) How many firms will operate in this market in the long run? (Round your answer to two decimal places.)
- Suppose there are 500 identicsl competitivd firms producing widgets and assume the total cost curve for each firm is given as, TC= 5q2+wq+10 and marginal cost is given as MC=10q + w where w is the widget maker's wage and q is the firm's output. If w=$50 what is the equation of the firms short run supply curve? 1) what is the average firm's profit (losses) at the new price of $61? 2) is the average firm in the short-run or long run? given it's profit(losses) should the firm continue to operate? 3) what would you predict, based on the perfectly competitive model of markets, will happen in this industry in the long run?Suppose Glen’s Grinders, LLC is a retail outlet that sells meat grinders for household use and operates in a perfectly competitive market where there is a total of 10 firms in this market including Glen’s Grinders. Basically, all the firms in this competitive market have technologies (production and cost conditions) that are the same as Glen’s. Suppose Glen’s total cost function is given by: C(q) =100 + 25q + q^2 a. Calculate Glen’s optimal output level and profits if the monthly market inverse demand for units of the product is stable and given by: P= 250 - Q b. If Glen is typical of the firms in this industry (same as the other 9), calculate the long-run equilibrium output, price, and profit level that will ultimately prevail in this industry.Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + 0.5Q^2The market demand curve for this product is: Qd= 120 −PThere are 9 firms in the market.a) What are each firm’s: fixed cost, variable cost, marginal cost, and average total cost? Graph the average-total-cost curve and the marginal-cost curve.b) Give the equation for each firm’s supply curve.the average-total-cost curve at its minimum? What is marginal cost and average totalc) Give the equation for the market supply curve for the short run in which the numbercost at that quantity?
- The table below shows the average cost (AC) for a purely competitive market. The average revenue (AR) is constant at RM5 per unit and the firm’s total fixed cost (TFC) is RM4. If the average revenue falls to RM3 per unit, calculate the firm’s new profit or loss at the equilibrium. Based on your answer, should the firm continue or stop the production? Justify. Output (Units) Total Revenue (RM) Average Cost (RM) Total Cost (RM) Marginal Cost (RM) Marginal Revenue (RM) 1 8.0 2 5.5 3 4.0 4 3.5 5 3.8 6 4.5 7 6.0Suppose that, in a perfectly competitive industry, every firm has total cost function TC(Q)= 5million +4Q+Q²/50,000. Demand is given by D(p) - 375,000(42-2p). (a) If the industry consists of five firms, with no possibility of entry or exit, how much does each firm produce in equilibrium? (b) What is the profit of each firm? (c) How would you answer to part (a) change if there would be a possibility of entry and/or exit? Provide a sketch of how one would solve for the equilibrium outcome.A firm sells its product in a perfectly competitive market. Its total cost function is: TC = 900 - 20Q + Q2where TC is total cost and Q is output level.a. Find the firm’s average total cost function. b. Find the firm’s average variable cost function. c. Find the firm’s marginal cost function. d. Given the price is $100, what is the profit-maximizing output level? e. Given the price is $100, what is the profit level? f. Over time, is there going to be entry or exit in this competitive market? Why?
- Suppose that each firm in a competitive industry has the following costs: Totalcost:TC=50+1/2q2 Marginalcost:MC=q where q is an individual firm's 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 firm's 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 qfrom 5 to 15. Atwhat quantity is average-total-cost curve at its minimum? What is marginal cost and averagetotal cost at that quantity?c. Give the equation for each firm's 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 firm's profit or loss. Is there incentive for firms to…Consider a competitive industry with a large number of firms, all of which have identical cost functions c(y) = y2 + 1 if y > 0 and c(y) = 0 ify = 0. The demand curve for this industry is D(p)= 52-p.1. Find marginal cost and average cost functions.2. What is the competitive price in this market?3. What will be the number of firms in the industry?Suppose there is a perfectly competitive industry where all the firms are identical with identical cost curves. Furthermore, suppose that a representative firm’s total cost is given by the equation TC = 100 + q2 + q where q is the quantity of output produced by the firm. You also know that the market demand for this product is given by the equation P = 1000 – 2Q where Q is the market quantity. In addition, you are told that the market supply curve is given by the equation P = 100 + Q.i. What is the equilibrium quantity and price in this market given this information? The firm’s MC equation based upon its TC equation is MC = 2q + 1. Given this information and your answer in part (i), what is the firm’s profit maximizing level of production, total revenue, total cost and profit at this market equilibrium?ii. Is this a short-run or long-run equilibrium? Explain your answer.iii. Given your answer in part (ii), what do you anticipate will happen in this market in the long-run?iv. In this…