A firm has the demand function P = 500 - 1Q and the cost function C = 100 + 2Q + Q². Marginal cost is increasing in Q. Select one: O True O False The firm's demand function suggests perfect competition. Select one: O True O False The firm's marginal revenue function is MR = 500 - Q Select one: O True O False Given the firm's cost function, its fixed costs must depend on Q. Select one: O True O False
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- 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?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. If there are n number of firms , what is the industry supply curve?
- Suppose that each firm in a competitive industry has the following costs: where q is an individual firm’s quantity produced. The market demand curve for this product is 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 average total cost. 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? Give the equation for each firm’s supply curve. 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. Is there incentive for firms to enter or exit? In the long run with…K The marginal revenue and marginal cost functions of a food importer are given by 6e0.05Q MR=400-0.5Q and MC = If the firm makes a profit of 3500 when Q=8, calculate the profit when Q=12. Give your answer to two decimal places. The firm makes a profit of CamScannConsider the market for solar power. Assume the market is perfectly competitive and initially in long-run equilibrium; solar power sells for $.25 per kwh (kilowatt hour, a unit of power). Draw2graphs, oneto represent the market (supply and demand), and one to represent asingle firm (demand, marginal cost, and average cost curves). Assume a u-shaped average cost Show the equilibrium price and the quantity produced by the market (Q) and by each individual firm (q).
- Suppose a good's quantity demanded is QD = 8000 – 10p and market supply QS = 5p + 2000, and the market is competitive and in long-run equilibrium. Suppose then that the demand curve shifts upwards, so QD = 11,000 - 10p. Assuming we are in a constant cost industry and all firms have the same cost function, what will be the new short-run price and the new long-run price? O a. short-run: p = 400, long-run: p 600 O b. short-run: p = 600, long-run: p = 400 O c. short-run: p = 500, long-run: p = 1000 O d. short-run: p = 800, long-run: p = 600 Clear my choice Microsoft is selling a one-of-a-kind software program for which they have no competitors. The demand they face for their product is q = 1000 – 5p. Their cost function is C(q) = 1000 (Each copy of the program has zero marginal cost). How many copies do they sell? O a. 100 O b. 250 O c. 400 O d. 500Suppose 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…A firm in a perfectly competitive industry has patented a newprocess for making widgets. The new process lowers the firm’saverage cost, meaning that this firm alone (although still aprice taker) can earn real economic profits in the long run. a. If the market price is $20 per widget and the firm’s marginalcost is given by MC=0.4q , where q is the dailywidget production for the firm, how many widgets willthe firm produce? b. Suppose a government study has found that the firm’snew process is polluting the air and estimates the socialmarginal cost of widget production by this firm to be. If the market price is still $20, what is thesocially optimal level of production for the firm? Whatshould be the rate of a government-imposed excise tax tobring about this optimal level of production? c. Graph your results.
- Use the figure to select all the correct statements. $ A B Q1 Q2 Q3 Q4 Q5 Q6 OA. The distance between Curve A and Curve B shows the average profit of the firm at any given quantity of output. B. Curve A shows the total cost function of the firm. OC. The slope of the tangent line for Curve B when the quantity is Q2 is the marginal profit of the firm when output is Q2. OD. Curve B shows the total cost function of the firm. O E. The distance between Curve B and X-axis is the firm's total revenue at any given quantity of output.MC P=AR=MR ATC AVC Quantity The firm in the graph above represents the cost structure for all firms in the industry. a. What change will lead to long-run equilibrium in this market? O AVC will increase. O MC will decrease. O MR will decrease. O ATC will increase. b. The change in the graph above will be caused by: the market supply curve shifting to the right. O the market demand curve shifting to the right. O the market supply curve shifting to the left. O the market demand curve shifting to the left. PriceSuppose that each firm in a competitive industry has the following costs: Total cost: TC=50 + 1/2q^2 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. a. What is each firm's fixed cost? What is its variable cost? Give the equation for average total cost.
