3. Suppose the doll company American Girl has an inverse demand curve of P = 150 - 0.25Q, where Q measures the quantity of dolls per day and P is the price per doll. There production function equals Q = LO.5KO.5, they pay wages of 35 and they pay capital rates of 140. What is their daily long-run profit at the profit-maximizing output level?
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- 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?4.5 Show that the long-run equilibrium number of firms is indeterminate when all firms in the industryshare the same constant returns-to-scale technology and face the same factor prices.4.7 Technology for producing q gives rise to the cost function c(q) = aq + bg. The market demand forqisp =a - Bq.(a) If a>0, if b < 0, and if there are J firms in the industry, what is the short-run equilibriummarket price and the output of a representative firm?b) Ifa> 0 and b <0, what is the long-run equilibrium market price and number of firms? Explain.() Ifa>0and b > 0, what is the long-un equilibrium market price and number of firms? Explain.Suppose there are 500 identicsl competitivd firms producing widgets and assume the total cost curve for each firm is given as, TC= 5q2+wq+10 and marginal cost is given as MC=10q + w where w is the widget maker's wage and q is the firm's output. If w=$50 what is the equation of the firms short run supply curve? 1) what is the average firm's profit (losses) at the new price of $61? 2) is the average firm in the short-run or long run? given it's profit(losses) should the firm continue to operate? 3) what would you predict, based on the perfectly competitive model of markets, will happen in this industry in the long run?
- Based on the table, what is total revenue for John's Tricycle Company if it produces at its profit- maximizing output? Output Marginal Total Cost Revenue 7,500 5. 1,300 1,400 1,500 1,600 0006 10,500 7. 8. 000 13,500 O 10,500Q23 Suppose a perfectly competitive firm is currently operating with the following information: Output = 1500 tonnesAverage total cost = $627 per tonneAverage variable cost = $614 per tonneMarginal revenue = $620 per tonneMarginal cost = $620 per tonneAt the current level of output, this firm is _____ profit and is an earning economic profit of _____. a. Maximising; -$10500. b. Not maximising; -$10500. c. Maximising; $10500. d. Maximising; $9000. e. Not maximising; -$9000.Consider the perfectly competitive market for titanium. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. 100 90 80 70 60 50 40 АТС 30 20 AVC 10 MC O 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pounds) COSTS (Dollars per pound)
- Assume that the most efficient production technology available for making vitamin pills has the cost structure given in the following table. Note that output is measured as the number of bottles of vitamins produced per day and that costs include a normal profit. Output TC MC ATC 50,800 $170,000 $0.60 100,800 220,000 1.10 150,800 257,500 1.71 200,800 365,500 2.45 Instructions: Enter your answers rounded to two decimal places. a. What is ATC per unit for each level of output listed in the table? Enter your answers in the table above. b. Are there economies of scale in production? Yes c. Suppose that the market price for a bottle of vitamins is $1.71. At that price the total market quantity demanded is 301,600,000 bottles. How many firms will be in this industry? firm(s) d. Suppose that, instead, the market quantity demanded at a price of $1.71 is only 150,800. How many firms will be in this industry? firm(s) e. Review your answers to parts b, c, and d. Does the level of demand determine…Figure A Competitive Firm1.2 MC ATC AVC Given Pl =$7.00 P2 $8.50 P3 =$9.20 QI=100.00 A P3 B P2 P1 MR Quantity Q1 Refer to Figure A Competitive Firm1.2. At an output level of Q1, the average fixed cost is about O $0.70 O No answer text provided. O No answer text provided. O S0.80 %243. Suppose that each firm in a competitive industry has the following costs: Total Cost: TC = 50+ ¹/29² Marginal Cost: MC = q where q is an individual firm's quantity produced. The market demand curve for this product is Demand: QD = 120 - P where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market. What is each firm's fixed cost? What is its variable cost? Give the equation for a b (C) At q=10, the average-total-cost and average total cost at that quante e) f) long run supply curve. d) Give the equation for the market supply curve for the short run in which the number of firms is fixed. What is the equilibrium price and quantity for this market in the short run? In this equilibrium, how much does each firm produce? Calculate each firm's profit or loss. Do firms have an incentive to enter or exit? 8 In the long run with free entry and exit, what is fequilibrium pric
- Assume that a purely competitive firm has the schedule of costs given in the table below. output TFC TVC TC 0 $500 $0 $500 1 500 150 650 2 500 200 700 3 500 260 760 4 500 340 840 5 500 450 950 6 500 590 1090 7 500 770 1270 8 500 1000 1500 9 500 1290 1790 10 500 1650 2150 Complete the table below to show the total revenue and total profit of the firm at each level of output the firm might produce. Assume market prices of $50, $150, and $250. Market price = $50 Market price = $150 Market price = $250 Output Total revenue Profit (+) or loss (−) Total revenue Profit (+) or loss (−) Total revenue Profit (+) or loss (−) 0 $_____ $_____ $_____ $_____ $_____ $_____ 1 _____ _____ _____ _____ _____ _____ 2 _____ _____ _____ _____ _____ _____ 3 _____ _____ _____ _____ _____ _____ 4 _____ _____ _____ _____…The following graph shows the short-run average total cost curves and the long-run average cost curve for a publishing firm. The five marked quantities indicate points of tangency between each short-run average total cost curve (SRATC) and the long-run average cost curve (LRAC); for example, Q₁ marks the point of tangency between SRATC₁ and LRAC. The orange point on SRATC3 indicates the firm's current output level in the short run (Q3). COST PER UNIT SRATC₁ LRAC SRATC₂ Q₁ Q₂ SRATC3 24 QUANTITY OF OUTPUT SRATC5 SRATC4 | 1 Q5 <4. Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 500 + 0.5q Marginal cost: MC = q Where q is an individual firm's quantity produced. The market demand curve for this product is Demand: Q" = 120 – P Where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market (a) What is each firm's fixed cost? What is its variable cost? Give the equation for average total cost. (b) Graph average-total-cost curve and the marginal-cost curve for q from 5 to 15. At what quantity is average-total-cost curve at its minimum? What is marginal cost and average total cost at that quantity? (c) Give the equation for each firm's supply curve. (d) Give the equation for the market supply curve for the short run in which the number of firms is fixed. (e) What is the equilibrium price and quantity for this market in the short run? (f) In this equilibrium, how much does each firm produce? Calculate each firm's profit or loss. Is…