otal Cost Function (TC) for every firm in perfect competition is: C = 0.1 q2 + q + 10 Industry demand function is Q = 4,000 - 400p 1) Determine profit or loss for every firm if firms number is 100 2) Determine firms numbers to long run equilibrium
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Total Cost Function (TC) for every firm in
Industry demand function is Q = 4,000 - 400p
1) Determine profit or loss for every firm if firms number is 100
2) Determine firms numbers to long run equilibrium
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- If demand function is given by P = 25 - Q and Total cost function TC = 3Q. Calculate firms price and quantity under perfect competition.Total cost function in competitive firm is TC = 27+ 3Q2. If firm gets normal profit please find the average total cost of this firm.For a perfectly competitive firm, profit maximization occurs when output is such that A) marginal revenue (MR) = marginal cost (MC). B) total cost (TC) is minimized. C) total revenue (TR) equals total cost (TC). D) average total cost (ATC) is minimized. E) total revenue (TR) is maximized.
- The cost curves below are for a firm competing in a perfectly competitive industry. If the market price is $5, in the short - run a profit - maximizing firm would: Produce and earn a negative economic profit Not produce (as it leads to a negative profit) Produce and earn a normal profit Produce and earn a positive economic profit The cost curves below are for a firm competing in a perfectly competitive industry. If the market price is $5, in the short-run a profit-maximizing firm would: Price and cost 16 15 14 13 12 11 10 9 8 6 3 MO O Produce and earn a negative economic profit O Not produce (as it leads to a negative profit) O Produce and earn a normal profit O Produce and earn a positive economic profit ATC AVC 6 bis & QuantitySuppose rocking chair manufacturing is a perfectly competitive industry in which there are 1,000 identical firms. Each firm's total cost is related to output per day as follows: Output Total Revenue ($) Total Variable Cost ($) Total Fixed Cost ($) 1 1,000 750 500 2 2,000 1,250 500 3 3,000 2,000 500 4 4,000 3,000 500 5 5,000 4,500 500 How many chairs would the firm produce at prices of $1,000? (In computing quantities, assume that a firm produces a certain number of completed chairs each day; it does not produce fractions of a chair on any one day.) chairsAssume a number of street vendors sell hamburgers in a city. Each vendor has a marginal cost of 30 NOK per hamburger sold and there are no fixed costs. The maximum number of hamburgers that any vendor can sell is 100 per day. a) If the market is perfectly competitive and the price of each hamburger is 40 NOK. How many hamburgers does each street vendor want to sell and what is each vendor’s profit per day assuming the desired quantity is sold?b) Why is this solution not a long run equilibrium?c) Suppose all the vendors merges and thus appears as a monopolist in the market. After merging marginal cost is constant. Make a diagram and explain the optimal solution for the monopolist.d) How can you explain that the solution from c) is such that the profit is maximized?e) Explain the social costs of the monopoly situation in this market. f) Suppose many consumers in this hamburger market became “addicted”. How would you explain this change in consumers demand and how would it affect social…
- Consider a competitive firm with a short-run cost function C(q)=100q-q^2+(1/5)q^3+450(a) Suppose that the market price is $205. Find the optimal output. Find the profitor loss at the optimal output. Will the firm stay or shutdown? Why?(b) Suppose that the market price is $105. Find the optimal output. Find the profitor loss at the optimal output. Will the firm stay or shutdown? Why?(c) Suppose that the market price is $205 and there is a tax of $65 per unit produced. Find the optimal output. Find the profit or loss at the optimal output. Will the firm stay or shutdown? Why?Consider a competitive firm with a short-run cost function C(q) = 100q−q2 + 1/5q3 +450. (a) Suppose that the market price is $205. Find the optimal output. Find the profit or loss at the optimal output. Will the firm stay or shutdown? Why? (b) Suppose that the market price is $105. Find the optimal output. Find the profit or loss at the optimal output. Will the firm stay or shutdown? Why? (c) Suppose that the market price is $205 and there is a tax of $65 per unit produced. Find the optimal output. Find the profit or loss at the optimal output. Will the firm stay or shutdown? Why?If a perfectly competitive firm's average total cost is less than the price, then the firm A) incurs an economic loss. B) makes an economic profit. C) makes zero economic profit. D) makes either zero economic profit or an economic profit depending on whether the marginal revenue is equal to or greater than the price. E) None of these answers is correct because the relationship between the price and average total cost has nothing to do with the firm's profit.
- A perfectly competitive firm has the total cost curve is given by: TC = 270+13q+0.4q2 . If the market price is $65. What is the firm supply curve (supply equation) Select one: (a) p=13+ 0.8q : p<13 (b) p=13+ 0.4q : p>13 (c) p=13+0.8q : p>13 (d) p= 270 + 13q : P>13Firms in the market for dog food are selling in a purely competitive market. A firm producing dog food has an output of 10,000 pounds of dog food, for which it sells for $0.50 a pound. At the output level of 10,000 pounds the average variable cost is $0.40, the average total cost is $0.70, and the marginal cost is $0.50. (a) What would you expect the firm to do in the short run? Explain.Consider a firm in a Perfectly Competitive industry. Suppose the price in this industry is $26. The total cost (TC) function for each firm is TC = 0.05q^2 + 1,080. If the marginal cost (MC) function for the firm is MC = 0.1q, a)what is the profit maximizing quantity for the firm to produce? b)what is the profit for the firm at the profit maximizing point?
