Consider a firm running a business in the pure competition setting. This firm's cost function is as follows question are consistent with the notations used in class. What is the short-run supply function for this cost structure? OA-s(y) = y²-8y + 2 y 23 Otherwise, (y) = 0 OB.s(y) = y²-8y + 2 y 26 Otherwise, s(y) = 0. ³-4y + 2 y 23. Otherwise, (y) = 0 05 (9) Os(y)=³-4y + 2 y 26. Otherwise, x(x) = 0 c(y) = 33-4² 30 Note that the notations in thes

Consider a firm running a business in the pure competition setting. This firm's cost function is as follows question are consistent with the notations used in class. What is the short-run supply function for this cost structure? OA-s(y) = y²-8y + 2 y 23 Otherwise, (y) = 0 OB.s(y) = y²-8y + 2 y 26 Otherwise, s(y) = 0. ³-4y + 2 y 23. Otherwise, (y) = 0 05 (9) Os(y)=³-4y + 2 y 26. Otherwise, x(x) = 0 c(y) = 33-4² 30 Note that the notations in thes

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Proudction Costs

Section: Chapter Questions

Problem 7SQ

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Queston 2: The Netnam Company total cost function is: TC = 2q + 2q2 + 75 Suppose that the firm is in perfect competitive market. Write the firm’s short run supply function? If the current market price is $30 per unit, find the firm’s optimum output? How much profit does the firm obtained? If the market price is at $10, what is the firm’s output decision? Explain your answer. Question 3: In the short-run, the ABC Company has fixed cost of 4. The firm’s average variable cost function is AVC = q + 1. The current market price is $7. What is the firm’s output to maximize profit? Calculate this profit level? Find the market price at which firm is at break-even status? Calculate the market price at which firm will shut down the business? Find the firm’s short-run supply function? Draw the firm’s supply curve.
Assume the following cost data are for a purely competitive producer Total Product AFC AVC ATC MC 0 1 $60 $45 $105 $45 2 $30 $42.50 $72.50 $40 3 $20 $40 $60 $35 4 $15 $37.50 $52.50 $30 5 $12 $37 $49 $35 6 $10 $37.50 $47.50 $40 7 $8.57 $38.57 $47.14 $45 8 $7.50 $40.63 $48.13 $55 9 $6.67 $43.33 $50 $65 10 $6.00 $46.50 $52.50 $75 At a price product of $56, will this firm produce in the short run? Why or Why not? If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? Explain. What economic profit or loss will the firm realize per unit of output?
Two months ago, on July 1, 2019, the State of Illinois raised gasoline taxes by $.19 (19 cents) per gallon of gas Question 3: For this question, please model the short-run impact of this tax on a typical Illinois gas station. The horizontal axis will be qgas (the output of this particular producer) and the vertical axis will measure price in dollars, $. This firm is subject to the Law of Diminishing Marginal Product. Begin by graphically depicting the “Family of Short Run Cost Curves” (AFC, AVC, ATC, MC) for this producer in late June, prior to the implementation of the new gasoline tax (you must submit a graph).
Glen Eira City Council wants to impose a tax to fish and chips shops. It is considering two types of tax:- a lump sum of 500$ on each fish and chips owner- a tax of 2$ per kg of fish and chips sold, paid by each fish and chips owner(a) Which cost curve would shift as a consequence of each type of tax? (AFC, AVC, (b) Consider the following table of long-run total cost for three different fish andATC, MC)?
Consider a small business that makes pastries. The business has rented a building to be used as its factory and shop floor. The rent of the building is $2,000 per week. The rest of the firm's weekly costs are as follows: ●Income lost from alternative employment - $2,000 ●Explicit variable costs - $1,500 ●Implicit variable costs - $ 500 i. If the firm sells 1,000 pastries per week, at $6 per pastry, calculate the firm's weekly ●Accounting profit, and ●Economic profit ii. Based on your answer to part b. i. above, should the firm continue to operate? Why or why not? iii. Assume that the firm continues at the current output level of 1,000 pastries per week while the prices start to fall. The firm should consider 'shut-down' if the price falls below what dollar value? Explain using relevant calculations and concepts
Assume the following cost data are for a purely competitive producer Total Product AFC AVC ATC MC 0 1 $60 $45 $105 $45 2 $30 $42.50 $72.50 $40 3 $20 $40 $60 $35 4 $15 $37.50 $52.50 $30 5 $12 $37 $49 $35 6 $10 $37.50 $47.50 $40 7 $8.57 $38.57 $47.14 $45 8 $7.50 $40.63 $48.13 $55 9 $6.67 $43.33 $50 $65 10 $6.00 $46.50 $52.50 $75 In the table below, complete the short run supply schedule for the firm (columns 1 and 2) and indicate the profit or loss incurred at each output (column 3) 1 2 3 4 Price Quantity supplied, single firm Profit (+) or loss (-) Quantity supplied, 1500 firms $26 $32 $38 $41 $46 $56 $66
A firm has the following information on production and costs from past data: Output (Y) 0 6 12 18 Total Cost (TC) 9 2775 5361 8199 If the total cost function is known to be TC=aY3+bY2+kY+f, and the demand for the product of the firm is Y=320-(1/2)P. answer the following: Determine the coefficient of the cubic cost function. Derive all cost and revenue curves and the profit function. Show that the MC cuts the AVC when AVC is at its minimum point. Plot the relevant graph indicating all points.
A marginal profit curve equation is : MP= −2Q^2 + 160Q + 2145. You are required to determine the level of production, or range of production at which the company will have:(i) An increasing returns to scale(ii) A decreasing returns to scale (iii)A negative returns to scale (iv) Its maximum profit
Consider an individual firm competing in a market with many other producers and producing an undifferentiated product (i.e., consumers consider the product from one firm to be exactly as good as the product from any other firm). Assume this firm faces a conventional production technology. The short-run production function has a small range of increasing marginal product (increasing marginal returns) and then is subject to the Law of Diminishing Marginal Product (diminishing marginal returns). Putting quantity q on the horizontal axis and dollars $ on the vertical axis, depict four important curves: Average Fixed Cost (AFC), Average Variable Cost (AVC), Average Total Cost (ATC), and Marginal Cost (MC). Label each of these curves with the subscript 0 to indicate that these are the original (or current) curves. For this question, assume the individual producers in this industry have no control over prices; they must accept the exogenously given price, P0. On a graph containing the four…
Consider the following table of long-run total cost for four different firms: Which firms have diseconomies of scale over the entire range of output? a. Firm 1b. Firm 2c. Firm 3d. Firm 4e. Firm 2 and 4
Marginal Analysis II Question 2 Suppose a competitive firm has as its total cost function: TC=18+2q2TC=18+2q2 Suppose the firm's output can be sold (in integer units) at $58 per unit. Using calculus and formulas (don't just build a table in a spreadsheet as in the previous lesson), how many integer units should the firm produce to maximize profit? Please specify your answer as an integer. In the case of equal profit from rounding up and down for a non-integer initial solution quantity, proceed with the higher quantity. Hint 1: The first derivative of the total cost function, which is cumulative, is the marginal cost function, which is incremental. The narrated lecture and formula summary explain how to compute the derivative. Set the marginal cost equal to the marginal revenue (price in this case) to define an equation for the optimal quantity q. Hint 2: When computing the total cost component of total profit for a candidate quantity, use the total cost function provided in the…
Use the following data to analyze the condition when the product proce is set at $32 Assume the following unit cost data are for a purely competitive producer. See table below: Required: A. What will be the profit maximizing or loss- minimizing output? B. How much would be the economic profit that the firm will realize per unit of output? C. How much would be the product price for the firm to be at a shutdown position?