If each competitive firm in an industry has the short-run cost function C=50 +5q+q^2, and the market price is $35, what is the profit-maximizing output level for each firm? What is the total revenue? What are the profits?
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If each competitive firm in an industry has the short-run cost function C=50 +5q+q^2, and the
market
revenue? What are the profits?
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- Consider a perfectly-competitive industry where each firm has the following long run cost function C(q) = q3 − 12q2 + 105q, where q is the firm’s output. What is the long-run equilibrium price in this market? (Round your final answer to two decimal places, if necessary.)A perfectly competitive industry consists of 700 identical firms, each with a short-run supply curve given by Qs = –20 + 15P. What is the equation for the industry's short-run supply curve?A firm sells its product in a perfectly competitive market. Its total cost function is: TC = 900 - 20Q + Q2where TC is total cost and Q is output level.a. Find the firm’s average total cost function. b. Find the firm’s average variable cost function. c. Find the firm’s marginal cost function. d. Given the price is $100, what is the profit-maximizing output level? e. Given the price is $100, what is the profit level? f. Over time, is there going to be entry or exit in this competitive market? Why?
- Consider a competitive industry with a market demand curve of P = 120 - Q, where P is market price and Q is the quantity demanded in the market. In the short run there are 4 firms in the industry, and each firm has a total cost function of TC = 144 + q^2, where q is output of the individual firm. The short-run industry supply curve Qs is?The market for drones is perfectly competitive. Assume for simplicity that fractions of everything, including firms, is possible. We have identical firms, each with a Total Cost curve of TC=334+q^2 and Marginal Cost curve MC=2a. Market demand is Q=807-2P. If the Marginal Cost for every firm decreases by $10 at every quantity, what is the short-run market price? (You can assume that MC>=AVC at every quantity for this question).Suppose that the current price per unit of the good is 10 pounds. A perfectly competitive firm faces the cost function, C = 100 + (1/5)Q2, with marginal cost, MC, equal to (2/5)Q, where Q denotes the quantity produced. Find the profit-maximizing output for this firm in the short-run. Calculate profits. At the profit-maximizing output, is the firm covering its variable costs?
- Suppose 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.]Assume a competitive industry is initially at its long-run equilibrium, given the inverse market demand and supply functions:p = 25000 − 0.2qd ??? Qs = 5000 + 0.3qsIf all firm in this market have identical cost structures:a) How many firms operate in this market at this point? b) What is the profit maximizing quantity produced by each competitive firm?. Suppose a firm operating in a perfectly competitive industry has costs in the short run given by: SRTC = 8 + ½q2 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.]
- 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?Consider a perfectly competitive firm with a short-run total cost function given by TC = q2 + 100 where q is the level of output. The short-run marginal cost function is given by MC = 2q If the price of output is $60, how much output should the firm produce in order to maximize profit? Calculate the firm’s economic profit at this level of output Assuming that each firm in the industry has an identical cost function, is $60 a long-run equilibrium price for this perfectly competitive industry?In a perfectly competitive market with a constant cost industry, there are currently 100 identical firms, each with the total cost function TC(Q) = Q2 + 4Q + 36. The market demand is Q = 1800 – 50p. What is the price at the short-run equilibrium? What is the net profit/loss of each firm at this price?
