Consider a perfectly competitive market where the demand for the good is given by Q=769-5p, where Q denotes the quantity demanded at price p. On the supply side, the good can be produced by identical firms with U-shaped average cost curves. The total cost of the industry as a function of total output, Q, is given by C(Q) = 5 Q What is the (long run) equilibrium price in this market?
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- Suppose that the development of a new drought-resistant hybrid seed corn leads to a 50 percent increase in the average yield per acre without increasing the cost to the farmers who use the new technology. If the producers in the corn production industry were price takers, what would happen to the following? a. the price of corn b. the profitability of corn farmers who quickly adopt the new technology c. the profitability of corn farmers who are slow to adopt the new technology d. the price of soybeans, a substitute product for cornSuppose a firm operating in a perfectly competitive industry has costs in the short run given by: SRTC = 8 + ½q^2 and therefore MC = q. Assuming that the firm is a price-taker operating in a competitive market, derive an expression for the firm’s supply curve, (the profit maximizing output for the firm as a function of the market price, i.e., q^s = f(p). Assuming the firm is one of 100 identical firms in the industry, what is the short-run supply curve for the industry, i.e., Q^s = f(p)? If demand is given by Q^D = 1000 – 100p, what are the short-run equilibrium price, market quantity, and firm quantity? Is this a long-run equilibrium? [Hint: Calculate firm profit in the equilibrium.]Can you help with parts d,e and f please? A perfectly competitive firm has the following total cost function: TC = 4,500 + 2q + .0005q2 where TC is total cost in dollars and q is the quantity of output produced. a. Assume this perfectly competitive market consists of 800 firms with cost structures identical to the one above. What is the equation for the market supply curve? Assume the market demand curve is: Qd = 5,600,000 – 400,000P where Qd is the quantity demanded in the market and P is the commodity’s price in dollars. b. What is the market’s equilibrium price? c. Assuming the market is in equilibrium, using marginal revenue and marginal cost determine the firm’s profit-maximizing quantity of output? What does the profit-maximizing firm’s total economic profit equal? Assume the total cost function above: TC = 4,500 + 2q + .0005q2 is associated with the short-run total cost function that corresponds to the minimum point on the long-run average total cost curve and this is a…
- Consider a perfectly competitive market, where the current number of firms is 50. Each firm has one unit of capital and can product q(1, L) = √L units of output with one unit of capital at a cost v per unit, and L units of labor at a cost w per unit in the short-run. a) Find a firm's short-run supply curve, qs(p), and the industry short-run supply curve, Qs(p). b) Given the market demand, = 10000 - 50p, and the industry short-run supply curve, find the short-run equilibrium price and quantity assuming that w = 1.Consider a competitive market in which the market demand for the product is expressed as P = 75 ‑ 1.5Q, and the supply of the product is expressed as P = 25 + 0.50Q. Price, P, is in dollars per unit sold, and Q represents rate of production and sales in hundreds of units per day. The typical firm in this market has a marginal cost of MC = 2.5 + 10q. Determine the equilibrium market price and rate of sales (output). Show your working. Determine the rate of sales (output) of the typical firm, given your answer to part (i) above. If the market demand were to increase to P = 100 ‑ 1.5Q, what would the new price and rate of sales in the market be? What would the new rate of sales (output) for the typical firm be?. Show your working If the original supply and demand represented a long‑run equilibrium condition in the market, would the new equilibrium (iii) represent a new long‑run equilibrium for the typical firm? ExplainSuppose that many small firms operating in the perfectly competitive market set-up. All firms are identical and have the total cost function c (q)= 40+8q+(q^2/10), where q is the individual firm’s production amount. The market inverse demand function is described as P= A - (Q/50), where A>0 is constant, and Q is the market quantity. In the short-run equilibrium, there are 78 firms in the market, and firm’s maximum profit is $22.5 a) find the short-run equilibrium price b) suppose that in the long-run, firms cost function is still the same C (q)= 40+8q+(q^2/10) (assume LR cost function has fixed component of 40) Find the long-run equilibrium number of firms? (Assume market demand in LR = market demand SR)
- A perfectly competitive industry has 150 identical firms. At a price of $8, the typical firm supplies 10 units of output, so the market quantity supplied is nothing units of output. (Enter your response as an integer.)Suppose that the firm operates in a perfectly competitive market. The market price of his product is$10. The firm estimates its cost of production with the following cost function: TC=10q-4q2+q3 A. What level of out put should the firm produce to maximize its profit? B. Determine the level of profit at equilibrium. C. What minimum price is required by the firm to stay in the market?Consider a perfectly competitive market, where the current number of firms is 50. Each firm has one unit of capital and can product q(1, L) = √L units of output with one unit of capital at a cost v per unit, and L units of labor at a cost w per unit in the short-run. a) Derive each firm's total cost function, c(q). B) Find a firm's short-run supply curve, qs(p), and the industry short-run supply curve, Qs(p).
- Consider a competitive firm with a short-run cost function C(q)=100q-q^2+(1/5)q^3+450(a) Suppose that the market price is $205. Find the optimal output. Find the profitor loss at the optimal output. Will the firm stay or shutdown? Why?(b) Suppose that the market price is $105. Find the optimal output. Find the profitor loss at the optimal output. Will the firm stay or shutdown? Why?(c) Suppose that the market price is $205 and there is a tax of $65 per unit produced. Find the optimal output. Find the profit or loss at the optimal output. Will the firm stay or shutdown? Why?A firm operates in a perfectly competitive market. The market price of its product is 4 birr and the total cost function is given by TC= 1/3 Q3 - 5Q2+20Q + 50, where TC is the total cost and Q is the level of output.a) What level of output should the firm produce to maximize its profit?b) Determine the level of profit at equilibrium.c) What minimum price is required by the firm to stay in the market?Assume the market for tortillas is perfectly competitive. The market supply and demand curves for tortillas are given as follows: Supply curve: P = 5Q Demand curve: P = 120 - 10Q The short run marginal cost curve for a typical tortilla factory is: MC = 20q Assuming all tortilla factories are identical, calculate the following: Equilibrium price for tortillas: __1__ Profit maximizing short run equilibrium level of output for a tortilla factory: __2__ Given profit maximizing output as above, a tortilla factory is: __3__ Total number of tortilla factories: __4__ Producer surplus of a tortilla factory: __5__