Market demand is Qd = 100 - p. Market supply is Qs = 4p. A competitive firm has MC = 2Q. How many firms are currently in the industry? %3! O 10 O 2 4.
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- Assume a competitive market in which each firm with has a cost function of: 0.2q3 -7.9q2 +181q. Q1: If the current market price is $87 per unit, how many units will this firm provide to the market? Q2: What are the short-run profits of this firm? Q3: What is the long-run market price, and how many units will each firm provide to the market? Q4: IF the demand func. for this market is P(Q)=1169.49-2Q, how many firms will run in this market in the long-run?Consider a set of 1000 companies operating in a competitive market. The supply curve for this market is given by O = 20+2P and the demand curve is given by D = 280-4P, where quantity Q is measured in millions of tons and Price P is measured in monetary units. Considering that the marginal cost of the individual firm is given by 2Q, the quantity Q being measured in thousands of tons, we ask: a) Sketch the market equilibrium and the equilibrium of an individual firm. b) What is the situation of this market at that particular moment. c) Make considerations about the long-run equilibrium trend of this market.Suppose that firm is currently producing 15 units of a good at a market price of $12. The firm has a MC of $12 and an average total cost of $8. What is the firm's economic profit and is it maximizing profits? O $0, yes O $60, no $60, yes O $0, no Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
- The market determined price in a perfectly competitive industry is P = Rs. 10. Suppose that the total cost equation of an individual firm in the industry is given by the expressionTC 1000+2Q+0.01Q2a) What is the firm’s profit-maximizing output level and profit? Is this profit normal profit or supper normal profit? Justify your answerb) At profit maximizing level what is firm total cost, total revenue and marginal costc) Why does a competitive firm is considered as a price taker and Monopoly firm as a price maker.The market determined price in a perfectly competitive industry is P = Rs. 10. Suppose that the total cost equation of an individual firm in the industry is given by the expressionTC 1000+2Q+0.01Q2a) What is the firm’s profit-maximizing output level and profit? Is this profit normal profit or supper normal profit? Justify your answerb) At profit maximizing level what is firm total cost, total revenue and marginal cost c) Why does a competitive firm is considered as a price taker and Monopoly firm as a price makerFor a firm with market power, what is the marginal revenue gained when one more unit of output is sold? Question 19Answer a. The price at which the extra unit is sold plus the rise in revenue from selling other units at a higher price b. The price of the unit of output sold minus the production cost of that unit c. The price of the unit of output sold d. The price at which the extra unit is sold less the drop in revenue from selling other units at a lower price
- A representative firm with short-run total cost given by TC= 50 + 2q + 2q2 operates in a competitive industry where the short-run market demand and supply curves are given by Qp = 1,410-40P and Qs = -390 + 20P. Its short-run profit-maximizing level of output is: O units O 1 unit O 2 units O 5 units O 7 unitsSuppose you are a perfectly competitive firm producing computer memory chips. Your production capacityis 1000 units per year. Your marginal cost is $10 per chip up to capacity. You have a fixed cost of $10,000 ifproduction is positive and $0 if you shut down. What are your profit-maximizing levels of production andprofit if the market price is ( a ) $5 per chip, ( b ) $15 per chip, and ( c ) $25 per chip? For case ( b ), explainwhy production is positive even though profits are negative?Wonopoly and natural resource prices Suppose that a firm is the sole owner of a stock of a natural resource. a. How should the analysis of the maximization of the discounted profits from selling this resource (Equation 17.63 be modified to take this fact into account? b. Suppose that the demand for the resource in question had a constant elasticity form q(t)=a[p(t)]b . How would this change the price dynamics shown in Equation 17.67? c. How would the answer to Problem 17.7 be changed if the entire crude oil supply were owned by a single firm?
- Suppose that a perfectly competitive firm faces a market price of $7 per unit, and at this price the upward-sloping portion of the firm's marginal cost curve crosses its marginal revenue curveat an outpuut level of 1,400 units. If the firsm produces 1,400 units, it's average variable costs equal $6.50 per unit, and its average fixed costs equal $0.80 per unit. What is the firm's maximizing (or loss-minimizing output level? What is the amount of it's economic profits (or losses) at this output level?Suppose that over the short run (say the next 5 years), demand for OPEC oil is given by P = 165 – 2.5q. Here q is measured in millions of barrels a day. OPEC marginal cost per barrel is $15. What is OPEC’s optimal level of production? What is the prevailing price of oil at that level? Many experts contend that maximizing short-run profit is counterproductive for OPEC in the long run because high price reduces buyers to conserve energy and spur competition and new exploration that increases the overall supply of oil. Suppose that the demand curve just described will remain unchanged only if oil prices stabilize at $65 per barrel or below. If oil price exceeds this threshold, long run demand (over a second five year-period) will be curtailed to P = 135 – 2.5q. OPEC seeks to maximize its total profit over the next decade. What is the optimum output and price policy? (assume all values are present values)Suppose that the firm in a competitive market faces the following revenues and cost: Quantity Total Revenue Total Cost 0 $0 3 1 $7 5 2 14 8 3 21 12 4 28 17 5 35 23 6 42 30 7 49 38 In order to maximize profits, the firm will produce__ a. 6 units of output because marginal revenue equals marginal cost. b. 8 units of output because marginal revenue equals marginal cost. c. 4 units of output because marginal revenue exceeds marginal cost. d. 1 unit of output because marginal cost is maximized.