Suppose that the identical firms in a perfectly competitive market for cakes have long-run total cost functions given by TC(Q) = 1003 – 60Q² + 100Q. Total cost is independent of the number of firms and total output in the market. If market demand is QD = 1,000 – 40P, solve for the output per firm (Q), the long-run competitive equilibrium price (P), the market demand (Qº), and number of firms in the market (N).
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- Suppose that many small firms operating in the perfectly competitive market set-up. All firms are identical and have the total cost function c (q)= 40+8q+(q^2/10), where q is the individual firm’s production amount. The market inverse demand function is described as P= A - (Q/50), where A>0 is constant, and Q is the market quantity. In the short-run equilibrium, there are 78 firms in the market, and firm’s maximum profit is $22.5 a) find the short-run equilibrium price b) suppose that in the long-run, firms cost function is still the same C (q)= 40+8q+(q^2/10) (assume LR cost function has fixed component of 40) Find the long-run equilibrium number of firms? (Assume market demand in LR = market demand SR)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?In a purely competitive market at its long-run equilibrium, which of the following is not true? a The marginal benefit of the last unit of the product equals the marginal cost of producing that unit. b The maximum willingness of buyers to pay for the last unit of the product equals the minimum acceptable price for the seller of that unit. c Price equals marginal cost, and they are equal to the lowest attainable average cost of production. d The combined amount of consumer and producer surpluses is at its minimum possible.
- Can you help with parts d,e and f please? A perfectly competitive firm has the following total cost function: TC = 4,500 + 2q + .0005q2 where TC is total cost in dollars and q is the quantity of output produced. a. Assume this perfectly competitive market consists of 800 firms with cost structures identical to the one above. What is the equation for the market supply curve? Assume the market demand curve is: Qd = 5,600,000 – 400,000P where Qd is the quantity demanded in the market and P is the commodity’s price in dollars. b. What is the market’s equilibrium price? c. Assuming the market is in equilibrium, using marginal revenue and marginal cost determine the firm’s profit-maximizing quantity of output? What does the profit-maximizing firm’s total economic profit equal? Assume the total cost function above: TC = 4,500 + 2q + .0005q2 is associated with the short-run total cost function that corresponds to the minimum point on the long-run average total cost curve and this is a…Suppose that each firm in a competitive industry has the following costs: Total Cost: TC=50+12q2TC=50+12q2 Marginal Cost: MC=qMC=q where qq is an individual firm's quantity produced. The market demand curve for this product is: Demand QD=140−2PQD=140−2P where PP is the price and QQ is the total quantity of the good. Each firm's fixed cost is . What is each firm's variable cost? 50+12q50+12q 12q12q qq 12q212q2 Which of the following represents the equation for each firm's average total cost? 50q+12q50q+12q 50q50q 50+12q50+12q 12q12q Complete the following table by computing the marginal cost and average total cost for qq from 5 to 15. q Marginal Cost Average Total Cost (Units) (Dollars) (Dollars) 5 12.50 6 11.33 7 10.64 8 10.25 9 10.06 10 10.00 11 10.05 12 10.17 13 10.35 14 10.57…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.]
- Consider a perfectly competitive market with the market demand functionQd = 1000 − 10pThere are many small, identical firms in the market. Each firm has the marginal cost function:MC = 10 + 10qand the average total cost function:ATC = 45/q + 10 + 5q(a) Suppose the equilibrium price is currently 30 (in the short run). Determine the quantity sold by eachfirm, the market equilibrium quantity, and the number of firms there must be in the market. Hint: Onceyou know the market quantity and quantity per firm, you can back out the number of firms.(b) If entry and exit is possible in the long run, determine long-run equilibrium price, quantity sold by eachfirm, the market equilibrium quantity, and the number of firms there will beThe total cost function of one of the firms is expressed by C(Q) = 100 + 4Q2, and demand is P = 80 – 4Q Find the equilibrium price and total quantity that the industry produces. Suppose that Jollibee successfully acquired McDonalds through a hostile takeover. What would be the new equilibrium price and quantity if MR = 80 – 4Q? Is this hostile takeover beneficial?Suppose a perfectly competitive market with 5 firms in the market. Each firm has supply characterized by P(q)=MC(q)=2+q/2. If 160 units were transacted in total, what was the market price?
- Consider a market with demand given by Q=100-P. The market is perfectly competitive with 60 firms and all have same cost structure. They all have no fixed costs and a constant variable cost of USD 40. How do we get the market supply curve for this situation.Suppose that each firm in a competitive industry has the following identical costs:Total cost: TC = 25+0.25Q2,where Q is an individual firm’s quantity produced.The market demand curve for this product is as follow:Demand: P=60-0.095Q,where P is the price and Q is the total quantity of the good. Currently. (i) Identify each firm’s fixed cost, variable cost, and its marginal cost.(ii) Suppose that there are 10 firms in the market. Construct the market supply function in the short run. Determine the equilibrium price and quantity. (Hint: If each firm’s supply function is Qi= a+bP then the market supply Qm can be the aggregated supply at each price as Qm = Q1+Q2+Q3+...+Qi where Qi is each firm’s supply function.)A market is at the perfectly competitive long run equilibrium, with market price equal to 2. All firms have the cost function TC(q)=5q−6q2+3q3 over the relevant range of output q. Suppose the market demand is 100 units at this price. How many firms are there in the market?