curves given by the following: TC = Assume that all firms in a competitive industry have cost 128 +8q+ 2q². Further, the market demand curve is given by: p = 722q. In the long run the equilibrium each firm that remains in the market will produce: A. 2.
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- A perfectly competitive frim has the total cost curve is given by:TC = 270+13q+0.4q2. What is the firm fixed cost? A. 13q+0.4q2 B. 270 C. 270+13q D. 27In a certain perfectly competitive market, there are 150 firms, and the short-run total cost function of each is given by Short Term Total Cost (q) = 3q³ - 16q² + 40q + 432 (note that "q" is the quantity produced by the firm). Besides that, any firm (active or potential entrant) can produce according to the total cost function Short Term Total Cost (q) = 2q³ - 16q² + 148q (desconsidering the entrance or exit of firms). Furthermore, the inverse aggregate demand function of this market corresponds to Pd(Q) = 676 - 0.56Q (which "Q" is the total quantity demanded). Based on this information, please check True or False in the arguments below: 1-The profit that each producer makes in the short-run competitive equilibrium is greater than the profit that each producer makes in the long-run competitive equilibrium. True or False? 2-In the long-term competitive equilibrium, there are 200 active firms in this market. True or False? 3-The price p* = 105 and the quantity Q* = 750 composes the…A perfectly competitive industry is composed of 100 identical firms with cost structure: q TC VC FC AVC ATC MC 0 4 1 8 2 10 3 14 4 20 5 28 6 38 b) Assuming that the market price is p = 8, what are the quantity produced by each firm and the profit it makes?
- The graph below shows a competitive firm's demand and cost curves. Assume that the firm produces at the profit-maximizing output level. What is the firm's profit? [Recall that in perfect competition a firm’s demand curve is a horizontal line drawn at the market price level and that P=MR=D.] Group of answer choices $144 $720 $576A perfectly competitive firm produces the level of output at which MR=MC on the rising portion of the firm’s marginal cost curve. At that output level, it has the following costs and revenues: TC = $830,000 VC = $525,000 TR = $428,000 Given that the firm produces the level of output at which MR=MC, calculate the amount of profit (loss) this firm earns. is it Profit=TR-TC?Consider the competitive market for products known as Bergers where there are 500 firms – with each firm in equilibrium. a.Draw the graph of the market and the graph of one of these initial 500 firms in its equilibrium that includes the curves for P, MC and ATC. b. Suddenly, a huge number of entrepreneurs enters the market so the number of firms increases by 500. Please draw what happens to the market and to the firm in the short run on the graphs above. Does the P increase or decrease? Does q increase or decrease? Does Q increase or decrease?
- Consider a competitive firm with total costs given by T C(q) = 100 + 10q + q^2. The firm faces a market price p = 50. (a) Graph the AT C, AV C, MC, and MR curves in a single graph, and indicate the profit maximizing level of output. If there are profits, shade the region corresponding to profit and label it. (b) If fixed costs increase from 100 to 500, what happens to the profit maximizing level of output, T R, T C, and π? (c) If fixed costs increase from 100 to 500, should the firm continue to operate in the short-run? What about the long-run?A perfectly competitive firm produces good X and has the following weekly cost data. ( Q = total output; TFC = total fixed cost; TVC = total variable cost): Q (units) TFC ($) TVC $ TC ($) ATC $ AVC $ MC $ 0 0 120 1 172 2 219 3 261 4 300 5 342 6 389 7 441 8 499 9 565 10 641 (a) Complete the above table. Round off values to the nearest two decimal places. (b) For each of the following prices determine this firm’s profit- maximising (or loss-minimising) output per week in the short run, and calculate the weekly profit or loss. Show your calculations (to two decimal places). (b.i) $42.50 (b.ii) $47.50…Suppose that the price of corn, a crop produced in a perfectly (or purely) competitive industry, increased 208% last year as demand for corn‑based ethanol fuel increased. What do you expect to happen in the long run for the corn industry given this recent success? A. The price per bushel of corn will continue to increase, yielding higher profits. Thus, more firms will enter the market indefinitely. B. Profits will become negative due to overfarming, which will result in the corn farming industry going under. C. Profits will be equal to zero. D. None of the above. Suppose the firms in the market for bacon, also a perfectly (or purely) competitive industry, experienced losses last quarter due to people becoming increasingly concerned about how high-fat diets negatively impact health. What do you expect to happen in the long run for the bacon industry? A. Seeing this as an opportunity to monopolize a fledging industry, firms will enter the industry, shifting…
- Suppose a perfect competitive firm’s total cost curve and marginal cost curve are TC= Q2+ 4Q+100 Also suppose that the market equilibrium price is given as $20. A. Find equations for the firm’s fixed cost (FC), variable cost (VC), average total cost (ATC), average variable cost (AVC) and Marginal cost (MC). B. Find the output level that minimizes average total cost (ATC). C. Calculate the price below which a firm in the market will not produce any output (the shutdown price).Suppose that a perfectly competitive firm faces a market price of $7 per unit. The output level corresponding to a marginal cost of $7 per unit is 1,000 units. At 1,000 units, its average variable costs equal $8 per unit, and its average fixed costs equal $1 per unit. The firm's profit-maximizing (or loss-minimizing) output level = . Write number only. The firm's economic profit (or loss) at this output level = . Write either profit number or loss number: e.g. profit 2000.Pindyck & Rubinfeld, 8e. Ch 8 #7. Suppose the same rm's cost function is C(q) = 4q 2 + 16. (From #6, we also know that the market price is $20 and the industry is perfectly competitive.) (d) At what range of prices will the rm produce a positive output? (e) At what range of prices will the rm earn negative pro t? (f) At what range of prices will the rm earn positive pro t?
