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- All firms in a perfectly competitive industry have a cost function given by: 10Q^2+200Q+2250. What is the profit maximizing quantity of each firm if the current market price is $500? What does each firms profit equal? Give typing answer with explanation and conclusionQ4) A perfectly competitive firm has the following total cost function: Total output Total Cost 0 20 1 30 2 42 3 55 4 69 5 84 6 100 7 117 How much will the firm produce if the price of the product on the market is Rs. 14 per unit? How will it change its output if the price rises to Rs.16 per unit?A firm in a perfectly competitive market has a short-run total cost function equal to SRTC=4+20q, where q is the number of units the firm produces. The firm faces a market price of $10. Enter the optimal number of units should this firm produce to profit maximize? Hint: this could be considered a "trick question", but it's easy once you think about the way a firm should profit maximize.
- E3 Consider a perfectly competitive firm in a short run scenario. Its total cost function is TC(q)= 4q^2 + 8. The market demand function is Q(p) = 800 - 15p, and there are 40 identical firms in the market. A. What is a firm's short-run supply function? Will it ever decide to shut down? Explain. And what is the market supply function? B. Suppose there are 40 identical firms in the market. What is the equilibrium price, p*? What is the equilibrium quantity supplied by each firm, q*? What is each firm's equilibrium profit? Will there be more entry into the market? Why? C. Repeat b, but with 80 firms this time. Label your results with superscript ** D. Repeat part b, but with 280 identical firms now. Label your results by superscript ***. Part E. Compare your results in parts b - d. Explain why the increase in the number of firms affects the results in that manner. What should happen to profit eventually as the number of firms keeps increasing? And when this happens to profit,…Consider the following short-run cost curves for a perfectly competitive firm. Picture is attched If the current market price is $6, the profit-maximizing output for this firm is ____________ If the price is $6 and the firm is producing at its profit-maximizing output, then total costs for the firm are ______________ If the market price is $1, the firm will produce ______________units of output in the short run. If the price is $3 and the firm is producing at its profit-maximizing output, then the firm would make _________ profit.In 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…
- The following table gives information about a firm’s short-run cost function in a perfectly competitive industry – candy manufacturing. a) What quantity will the firm supply when price of candy is $2? When price is $5? When price is $8? b) Consider the case where price = $2. Suppose that you have been renting capital (a candy-making machine) for a long time under a long-run capital rental agreement, but now the rental contract is about to expire. Should you renew your capital rental contract or not? Explain why or why not. How would your answer change if price is $5? How would your answer change if price is $8? Quantity Total Cost Average Variable Cost Average Total Cost Marginal Cost 0 10 1 15 5 15 5 2 17 3.5 8.5 2 3 18 2.66667 6 1 4 20 2.5 5 2 5 25 3 5 5 6 33 3.83333 5.5 8For an individual firm in a perfectly competitive market, the cost function is c(y) = 8y^2 + 5y + 6. a) Determine the firm's marginal cost, average total cost, average fixed cost, and average variable cost in terms of the market price, p. Answers should not be in terms of quantity, y. b) What is the firm's short-run shutdown condition? c) Find the firm's short-run shutdown price, p*. That is, if the market price falls below p*, the firm will shut down.In a perfectly competitive market, each firm has the cost function: q 2+10q+100. The price in the market is $50. a. What is the Marginal Cost for the firm? b. What is the Profit Maximizing Output? c. What is the Total Profit the firm receives? d. Should this firm continue to produce in the short run? Please explain. e. If the price is $20, should the firm continue to produce? Please explain.
- For an individual firm in a perfectly competitive market, let its cost function be c(y) = 8y² + 5y + 6. a) Determine the firm’s marginal cost, average total cost, average fixed cost, and average variable cost in terms of the market price, p. Answers should not be in terms of quantity y. b) What is the firm’s short-run shutdown condition? c) Find the firm’s short-run shutdown price pˆ. That is, if the market price falls below pˆ, the firm will shutdown.A perfectly competitive firm’s short-run total cost curve is C(q)= 100q-4q2+0.2q3+450. What is the firm’s short-run supply curve? Determine also the output level over which the short-run supply curve is defined. How much output will the firm supply if price, p=75?
