O different than the price charged by competing firms. O the same as the market price. O lower the more the firm produces. O higher the more the firm produces.
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- The price of a good is $50. The market for this good is perfectly competitive. The marginal cost that afirm producing these good faces is MC = 4 + 0.5Q, where Q is the quantity of good produced. Howmany units of the good does this firm produce? Show your mathematical workFigure 12-6 Price (dollars per pound) 5 Market price 4 3 2 0 10 20 30 MC ATC D = MR 40 Quantity (thousands of pounds) Figure 12-6 shows the demand, marginal cost (MC) and average total cost (ATC) curves for Jason's House of Apples. Refer to Figure 12-6. Which of the following statements is true? O Jason cannot earn a profit from selling any number of apples. O Jason should produce where MC equals $3 (point d) where he will maximize his profit. O Jason should produce where MC equals $3 (point d) where he will minimize his losses. Jason should produce where the distance between MC and his demand curve is greatest (point b).A) Suppose that Quinoa is produced with labor (L) and land (K). The markets for labor, land, and quinoaare all perfectly competitive, but the supply of labor and land are both upward sloping (i.e. not perfectlyelastic). As a result, the long-run industry supply curve for quinoa is upward sloping.i) Is producer surplus positive or zero in the long-run?ii) If all firms producing quinoa have identical production technology, do quinoa producers earn aprofit in the long-run?iii) In the long-run, where does producer surplus go in the quinoa market? B) Suppose the market for shoelaces is perfectly competitive and all firms have identical productiontechnology. If short-run profits for shoelace manufacturers are positive, what will happen to the supplyof shoelaces in the long-run? The price of shoelaces?
- Jason, a high-school student, mows lawns for families in his neighborhood. The going rate is $12 for each lawn-mowing service. Jason would like to charge $20 because he believes he has more experience mowing lawns than the many other teenagers who also offer the same service. If the market for lawn mowing services is perfectly competitive, what would happen if Jason raised his price? Do the participants in the market agree that his experience is relevant if the market is perfectly competitive?a) What is the firm's marginal cost when it is producing y units of output? b) Imagine that the price of input 1 is $16 per unit, the price of input 2 is $25 per unit, and the firm has fixed costs of $60. The firm is in a competitive market where the market price is $240 per unit of output. How much should the firm produce? How much profit does the firm make?COURSE: MICROECONOMICS - Bertrand's ModelAssume that a market is supplied by 2 companies, whose total costs are: CTi = 100Respective demand of each is: q1 = 120 - 2p1 + p2 and q2 = 120 - 2p2 + p1It is requested to:(a) calculate the firms' profit and reaction function.(b) plot the market equilibrium price and reaction function(d) calculate equilibrium quantity produced by each firm(e) determine profits that both firms will have at equilibrium.
- usiness EconomicsQ&A LibraryTwo firms A and B produce an identical product (Note: Industry Output = Q). The firms have to decide how much output qA and qB (Note: qA = Firm A Output; qB = Firm B Output) they must produce since they are the only two firms in the industry that manufacture this product. Their marginal cost (MC) is equal to their average cost (AC) and it is constant at MC = AC = X, for both firms. Market demand is given as Q = Y – 2P (where P = price and Q = quantity). Select any value for X between [21 – 69] and any value for Y between [501 – 999]. Using this information, calculate the Industry Price, Industry Output, Industry Profit, Consumer Surplus and Deadweight Loss under each of the following models: (a) Cournot Model Two firms A and B produce an identical product (Note: Industry Output = Q). The firms have to decide how much output qA and qB (Note: qA = Firm A Output; qB = Firm B Output) they must produce since they are the only two firms in…Assuming perfect competition in the market for Good A, let's assume that the equilibrium market price has been established. Assuming all other conditions remain constant (under the ceteris paribus assumption), let's suppose that the price of Good B, which is a substitute for Good A, increases. In this case, how does the equilibrium market price and quantity of Good A change? Show with the help of a graph.Q1) for a-firm how does the concept of producer surplus differ from that of profit.? Q2) if the supply curve is q=3+1.5p what is the producer surplus if p=12?
- Jason, a high-school student, mows lawns for families in his neighborhood. The going rate is $12 for each lawn-mowing service. Jason would like to charge $20 because he believes he has more experience mowing lawns than the many other teenagers who also offer the same service. If the market for lawn mowing services is perfectly competitive, what would happen if Jason raised his price? Do the participants in the market agree that his experience is relevant if the market is perfectly competitive? Refer to the graph below of a perfectly competitive market. How many units will the firm choose to sell, and at what price? In the short term, what will be the total revenue, total cost, and total profit of the firm? If at some point in the future the market price fell below $6 (for example where Point A is) what would the firm do? Ed produces table lamps in the perfectly competitive desk lamp market. Fill in the missing values in the following table. Suppose the equilibrium price in the…A market has an inverse demand curve of P = 40-Q and marginal cost of MC = 4+2Q. Find the competitive equilibrium price, quantity, and surplus. Show your work.Suppose a firm is operating in a competitive market and is maximizing profit by producing at thepoint where marginal revenue 5 marginal cost.Now suppose that consumer wealth decreasesin this market (and the good is a normal good).What might you expect to happen to the profitmaximizing output quantity for the firm?
