Consider a perfectly competitive market for a good in which the market demand is D = 100 the price per unit. The supply of a perfectly competitive firm is S; =, where S; denotes the quantity supplied by firm i=1,..,n. Suppose that each firm has a minimum average cost of $4. Given that all firms are identical then market supply is defined as S = nSj. The number of firms that would enter into the market in the long run is n= p where D represents the quantity demanded in the market and p %3D none of the other answers are correct. 96 50 48 52
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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?The marginal and average total cost curves for barbers in an area are cosntant at $12.00/haircut. The daily demand curve for haircuts in the area is given by: P = 22 - 0.001Qd where P is the price in dollars per haircut and Qd is the daily quantity demanded in number of haircuts. Haircuts are provided in a perfectly competitive market and each barber can provide exactly 25 haircuts daily. Suppose that the government decides to limit the number of barbers to 320. Each year, barbers must obtain a government-issued license to cut hair. Based upon the previous information: a. What will be the long-run equilibrium price for a haircut given there are only 320 licensed barbers?b. How much economic profit will each licensed barber earn daily?Consider the perfectly competitive market for gasoline. The aggregate demand forgasoline is D (p) = 100 - p. What is the choke price or the or the highest price possible in the given demand function?
- Suppose that a firm is producing in the short run with output given by: Q = 57L - L2 The firm hires labor at a wage of $32 per hour and sells the good in a competitive market at P = $41 per unit. Find the firm’s optimal use of labor. Enter as a value. ROUND TO THE NEAREST WHOLE NUMBERA competitive firm’s production function is given by y= f(x1,x2)= 4x11/2 + 10x21/2 a) The price of factor 1 is 1, the price of factor 2 is 1, and the price of output is 2. Find the profit-maximizing quantities of x1 and x2? What is the profit-maximizing quantity of output? b) Redo part (a), this time by first deriving the firm’s factor demand functions and the supply function, and then substituting the prices in these functions.Predicting Changes in Equilibrium Price and Quantity Suppose that the market demand for farmed salmon is Qd = 12 – p and the market supply of farmed salmon is Qs = 9.6 + 0.5p – 0.2pt, where Q is the quantity of salmon in millions of tons per year, p is the price of salmon in dollars per pound, and pt is the price of tilapia in dollars per pound. The supply function demonstrates that the facilities that are used to farm salmon are also suitable for farming tilapia. a) Use a market diagram to demonstrate that the equilibrium price and quantity of salmon is implicitly a function of the price of tilapia. That is, show how a change in the price of tilapia will impact the market for farmed salmon. (No need to use numbers here, just sketch and explain.) b) Using the supply and demand functions, derive the relationship between the price of tilapia and the equilibrium price and quantity of salmon. You should ultimately calculate and . Check your work by calculating the impact of an increase in…
- Please no written by hand and no emage There is a large market in Brisbane for home party entertainers (e.g. people who work as clowns, magicians, face painters, etc.). The market clearing price for the home party entertainers is $40 per hour. Assume that 157 home party entertainers are operating and each supplies 4 hours of labour a day. If the home party entertainers follow a linear, upward sloping supply curve and the smallest opportunity cost for offering their service is $29 per hour (when quantity supplied equals zero), what is the producer surplus per day for all home party entertainers to the nearest whole dollar figure (i.e. with no decimal places)?Suppose that a firm is producing in the short run with output given by: Q = 67L - L2The firm hires labor at a wage of $20 per hour and sells the good in a competitive market at P = $25 per unit. Find the firm’s optimal use of labor.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?
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