2. A competitive firm uses k and I to produce output q. Its production function is q = f(l, k) = l³k³. Wk = w₁ = $1. 1 1 a. Suppose that the output price is $2. Find the firm's demand for k and I that would maximize its profit. Find how many units of output it would produce and how much profit it would make. b. Now suppose the market price is unknown, but the firm wants to produce 144 units of output, and everything else remains the same. Find the firm's conditional factor demands that would minimize the cost. Also, calculate the associated total cost and the profit. c. Continuing the situation in part (b), what should be the minimum output price for the firm to continue to operate in the market?

Consider a competitive industry with a large number of firms, all ofwhich have identical cost functions c(y) = y^2 + 1 for y > 0 and c(0) = 0. Supposethat initially the demand curve for this industry is given by D(p) = 52 − p. What is the smallest price at which the product can be sold ?

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?

A5 5. Suppose the market is perfectly competitive. The equilibrium market price P = $20. A consumer's willingness to pay (WTP) is WTP = 30 - q.   (a) How much this consumer will buy and wh   (b) How much a typical firm will produce the firm's marginal cost MC = 2q. If the average total cost is ATC = q, can you tell if this firm is making positive, negative, or zero economic profit   (c) It is assumed here that all firms are identical. In what sense are they identica   (d) Suppose now that one firm's marginal cost is: MC = 25/q. Can this industry still remain perfectly competitive? Why not?l?s?y?

Suppose a firm is operating in a competitive market and is maximizing profit by producing at thepoint where marginal revenue 5 marginal cost.Now suppose that consumer wealth decreasesin this market (and the good is a normal good).What might you expect to happen to the profitmaximizing output quantity for the firm?

Each of 1,000 identical firms in the competitive peanut butter industry has a short-run marginal cost curve given by SMC = 2 + Q. If the demand curve for this industry is P=22- 3Q 1,000' what will be the short-run loss in producer and consumer surplus if an outbreak of aflatoxin suddenly makes it impossible to produce any peanut butter? Instructions: Round your answers to the nearest whole number. Producer surplus: $ Consumer surplus: $

Each firm in a competitive market has a cost function of C= 10g - 49² +g°. There are an unlimited number of potential firms in this market. The market demand function is Q= 34 -D. Determine the long-run equilibrium price, quantity per firm, market quantity, and number of firms. The long-run equilibrium price is $ (Enter your response as a whole number.) DEC 13 O tv MacBook Air 80 DII esc F1 F2 F3 F4 F5 F6 F7 FB @ $ % & 1 2 3 4 7 8. Q W Y tab S J caps lock C M. control option command つ エ > *: レ

Suppose that each firm in a competitive industry has the following costs: Totalcost:TC=50+1/2q2 Marginalcost: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.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 qfrom 5 to 15. Atwhat quantity is average-total-cost curve at its minimum? What is marginal cost and averagetotal 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 there incentive for firms to…

1-> O O O O Suppose the market for peaches is perfectly competitive. The short-run average total cost and marginal cost of growing peaches for an individual grower are illustrated in the figure to the right. Assume that the market price for peaches is $6.50 per box. What is the profit-maximizing quantity for peach growers to produce? boxes. (Enter your response as an integer.) At this level of output, profit will be $. (Enter your response rounded to the nearest dollar.) Peach growers will earn positive economic profit in the short run at any market price above $ per box. (Enter your response rounded to one decimal place.) Price (dollars per box) 10- 9- 8- 7- 6- 4- 3- 2- 1 0 MC ATC 10 20 30 40 40 50 60 70 80 90 100 Output (boxes of peaches per day) Q Next

A small firm operating in a purely competitive market has fixed costs of $45 per day compensates each employee $96 per day and has daily input and raw material costs as indicated in the table below.  A. What would be the profit maximizing level of production if demand increased such that each unit sold for $130?, will the company make an economic profit producing this quantity of output?  b: suppose the demand significantly decreased so that price for a unit of ouput sold to $115 each. What should the firm do? Why?