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- In a competitive market, the long-run demand is given by P = 20 - (0.01)*q Firms in the industry have as their cost structure the expression C = q3 - 5q2 + 10q. Determine: (a) equilibrium price b) Quantity produced-sold of the firm. c) What quantity is traded in the market? d) Over what time period does this market work? (short or long term?) e) What is the profit of the individual firm? f) What will be the behavior of the individual firm, will it exit or stay in the market?Assume a competitive industry is initially at its long-run equilibrium, given the inverse market demand and supply functions:P=25000−0.2Qd and p=5000+0.3QsIf all current firms in this market have identical cost structures and produce 50 units at their break-even point:a) How many firms operate in this market at this point? b) What is the profit maximizing quantity produced by each competitive firsuppose there are two technologies for producing steel. under technology a, a firm’s short-run total cost curve is 1 2 ( ) 100 10 2 a stc q q q (for which ( ) 100 a smc q q ), and using technology b it is 2 () 2 6 b stc q q ( () 4 b smc q q ). assuming there are 100 firms using technology a and 400 using b, determine the short-run market supply curve.
- 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?Assume a competitive industry is initially at its long-run equilibrium, given the inverse market demand and supply functions: P = 25000 − 0.2Qd and P = 5000 + 0.3Qs If all current firms in this market have identical cost structures and produce 50 units at their break-even point: 1- How many firms operate in this market at this point? 2- What is the profit maximizing quantity produced by each competitive firm?Assume the market for chips is perfectly competitive. The market supply and demand curves for chips are given as follows: supply curve: P = 0.000002Q demand curve: P = 11 - 0.00002Q The short run marginal cost curve for a typical chips factory is: MC = 0.1 + 0.0009Q Determine the equilibrium price for chips. Determine the profit maximizing short run equilibrium level of output for a chips factory. Assuming that all of the chips factories are identical, how many chips factories are producing chips?
- Suppose that the industry is a constant cost industry and entry and exit of firms are allowed. Assume the firm’s long-run cost function is given by LC = 1/300q3 - 0.2q2 + 4qa. Identify the most efficient plant size for the firm in the long-run by calculating the equilibrium output level. Brief discuss the process used to get your answer. b. Calculate the long-run equilibrium market price in this industry. Brief discuss the process used to get your answer.c. If the market demand for these firm’s product is Q = 8,000 – 200p½, determine the number of firms in the market under a long-run equilibrium. Brief discuss the process used to get your answer.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+0.01Q2 At profit maximizing level what is firm total cost, total revenue and marginal costThe market for calculators is a perfectly competitive industry facing typical U-shaped ATC, AVC, and MC cost curves. Demand is linear and has a downward slope. The industry is filled with many homogeneous firms. Using a side-by-side graph that depicts both the market (on the left) and a representative firm (on the right), graphically depict what will happen to (a) P (price), (b) Q (market output), (c) q (representative firm's output), and (d) π (representative firm's profit) when the market moves from the original short run equilibrium (SRE) with positive profits to a new long run equilibrium (LRE).
- Suppose Glen’s Grinders, LLC is a retail outlet that sells meat grinders for household use and operates in a perfectly competitive market where there is a total of 10 firms in this market including Glen’s Grinders. Basically, all the firms in this competitive market have technologies (production and cost conditions) that are the same as Glen’s. Suppose Glen’s total cost function is given by: C(q) =100 + 25q + q^2 a. Calculate Glen’s optimal output level and profits if the monthly market inverse demand for units of the product is stable and given by: P= 250 - Q b. If Glen is typical of the firms in this industry (same as the other 9), calculate the long-run equilibrium output, price, and profit level that will ultimately prevail in this industry.Suppose a competitive industry has 1,000 identical firms. After years of firms entering and exiting this industry the market is now in a stable equilibrium where all surviving firms are of the optimal size (their fixed costs are exactly such that the long run costs and short run costs are identical). Each firm has a total cost curve of: TC = 2 + 4q + .5q2. This total cost curve implies a marginal cost curve of: MC = 4 + q. a) How much will each firm produce? b) What is the equilibrium price in this market?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?
