Suppose that the market demand for a product is given by There are initially 10 identical firms each with a cost function given by c (q) = 225+ 12q+q². What is the long-run number of firms? 15 22 18 16 = 660-10P.
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- 21. A long-run equilibrium in an industry exists when cost per unit is at its lowest possible level. O. there is only one firm in the industry. O. the size of the market remains constant. O. price equals cost per unit. O. price equals marginal cost. 22. A tariff imposed on a country as a penalty for dumping goods is called a(n) O. antidumping duty. O. quota tariff. O. ad valorem tariff. O. revenue tariff. O. dumping duty.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.total cost function for this market is TC = 500 + 10Q2 1. What are the profit-maximizing quantity, price, and profit for this market? 2. If there are two firms Atlas and Bowden in this market with the same earlier total cost function and they engage in Cournot competition, what is each firm's equilibrium quantity, price, and profit? [NB: round quantities to nearest integer to find equilibrium quantity, price, and profit] Is this a long run equilibrium? Why or why not?
- 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?Question 3 The current market price in a competitive industry is $15. Every firm in the industry operates a technology that implies costs described by the function C = 12.5 + 0.3Q2. In the future, the technology is expected to change, and the new cost function will then be C = 10 + 0.2Q2. How much profit is the typical firm making today and in the long run? O. Profit is zero both today and in the long run. O. Profit is 125 both today and in the long run. O. Profit is 175 today and zero in the long run. O. Profit is 250 today and 125 in the long run.2) Cost functionsConsider the following total cost function for an individual firm: C(q)= 10 +q + ¼ q^2 a- At what level of output is average cost at its lowest?b- Draw a graph showing firm average cost against quantity.c- Suppose that there is an industry with two identical firms, with this cost function. What is the industry total cost curve? What is the industry marginal cost curve?d- Suppose these two firms together act in a perfectly competitive manner. What is the price level in the case where these firms act perfectly competitively? What are the profits of the firms given perfectly competitive pricing?
- 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 makerA 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 units
- Consider a competitive industry with a large number of firms, all ofwhich have identical cost functions c(y) = y2 + 1 for y > 0 and c(0) = 0. Supposethat initially the demand curve for this industry is given by D(p) = 52 − p.(a) What is the supply curve of an individual firm?(b) If there are n number of firms, what is the industry supply curve?(c) What is the smallest price at which the product can be sold?(d) Based on your answers to parts (a)-(c), explain in detail theequilibrium points based on the market activity with respect to the price, firmand industry.A firm sells its product in a perfectly competitive market where other firms charge a price of $110 per unit. The firm estimates its total costs as C(Q) = 70 + 14Q + 2Q2. (LO3) b. What price should the firm charge in the short run? c. What are the firm’s short run profits? d. What adjustments should be anticipated in the long run?Assume that a small firm was at one point in the SR experiencing positive economic profits, because it had been able to create a niche for its particular good. Currently, this firm is selling its good at P = $39.99. It’s AFC = $14.04, and its AVC = $25.95. Given this information, answer the following questions: What is the name of this market structure? Illustrate this firm’s current situation in its market. Specifically identify/label the areas that represent total revenue, total cost, and profit/loss/break-even. Given the information provided, fully yet briefly explain what likely happened to this firm. Fully yet briefly explain how this firm might regain its economic profits E. List the two concepts related to this market structure that are sometimes considered to be controversial. Fully yet briefly explain both sides of that argument.