Consider a competitive industry with a market demand curve of P = 121 – 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 = 25 + 6q + q2, where q is output of the individual firm. In the long-run market equilibrium what is the number of firms in the industry? Group of answer choices 26 15 5 110 21
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Consider a competitive industry with a market demand curve of P = 121 – Q, where P is market
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- A market is at long-run equilibrium of P* = S194 and Q* = 76800 units. All firms in the market are identical, and each has a marginal cost curve of P = 2 + 2g, where g is the quantity produced by that firm only. How many firms exist in the market? Answer:Suppose that the market demand for a product is given by Q= A-P (A> 0). Suppose also that in a competitive industry the typical firm's cost function is given by C(g) = a- (а > 0). 2 (a) Calculate the long-run equilibrium market price P and the output for the typical firm q. (b) Calculate the equilibrium number of firms in the market. (c) Derive, and determine the sign of, dn/dA and dn/da. Explain the signs intuitively.Suppose that there are 100 consumers in a perfectly competitive market and individual demand curves of these consumers are identical. Also, assume that there are 10 firms in the industry and these firms are identical as well. The following information is provided about this competitive market: Individual Demand Curve: P = 100 – 10QD Total Cost of a Representative (individual) Firm: TC = 20Q + (1/6) Q?+ 100 and MC=20+1/3Q a) What is the market demand function? b) What is the market supply function?
- A perfectly competitive industry is in long-run equilibrium. Each of the identical firms has a long- run cost function C = 100 + q². As a result, a firm's marginal cost function is MC = 2q. In the long-run competitive equilibrium, (a) How much does the firm produce? (b) What is the equilibrium price? (c) If the market quantity demanded at the equilibrium price is Q = 2500, how many firms are in the market?Q17 Assume that the cannabis firm called Aphria Inc. purchases resources a and b under perfectly competitive conditions and combines these resources to produce marijuana. Assume marijuana is sold in a perfectly competitive market. The MPs of a and b are 12 and 6, respectively, and the prices of a and b are $6 and $3, respectively. If profit-maximizing equilibrium exists, the price of marijuana will be Multiple Choice $0.50. $2. $6.67. $5. $1.Suppose that the market demand for a product is given by ( A > 0 and B > 0). Suppose QABP=-also that in a competitive industry the typical firm’s cost function is given by (k > 2()Cqkaqbq=++0, a > 0 and b > 0).(a) Calculate the long-run equilibrium market price and the output for the typical firm. (b) Calculate the equilibrium number of firms in the market.(c) Describe how changes in the demand parameters A and B affect the equilibrium number of firms in this market. Explain your results intuitively.
- Suppose the market demand for milk is Qd = 150 - 5P. Additionally, suppose that a dairy's variable costs are VC = 2Q² (where Q is the number of gallons of milk produced each day), its marginal cost is MC = 4Q and there is an avoidable fixed cost of $50 per day. In the long run there is free entry into the market. Suppose the demand for milk doubles. If in the short run the number of firms is fixed and their fixed costs are sunk, the short run market supply function is: Qs = 40P if price is greater than $20. Q$ = P/4 if price is greater than $20. Q³ = 2.5P if price is greater than $20. QS = 300-10P for all prices.Consider a set of 1000 companies operating in a competitive market. The supply curve for this market is given by O = 20+2P and the demand curve is given by D = 280-4P, where quantity Q is measured in millions of tons and Price P is measured in monetary units. Considering that the marginal cost of the individual firm is given by 2Q, the quantity Q being measured in thousands of tons, we ask: a) Sketch the market equilibrium and the equilibrium of an individual firm. b) What is the situation of this market at that particular moment. c) Make considerations about the long-run equilibrium trend of this market.Suppose you are given the following information about a particular industry: QD = 6500 – 100P Market Demand QS = 1200P Market Supply TC(q) = 722 + q2/200 Individual firm’s total cost function MC(q) = q/100 Individual firm’s marginal cost function Assume that all firms are identical and that the market is characterized by perfect competition. Find an individual firm’s supply curve. How many firms are there currently in the market? Find the equilibrium price and equilibrium market quantity. How much is output supplied by each firm, and how much profit does each firm make in the short run? Would you expect to see entry into or exit from the industry in the long run? Explain. What effect will entry or exit have on the market equilibrium? Find the long-run equilibrium price, the number of firms, and the amount of output each firm produces in the long run.
- In competitive markets, there are many small firms with each firm unable to influence the market price. Suppose company ABX operates in the wheat market. The company produces and markets wheats at a Price = $20 per container. The firm’s total costs are given as: TC = 50 +2Q + 3Q2 What level of output should the firm produce? Hint: Set P = MC and solve for Q. Use a graph to show your answers as wellUnit10 - Microeconomics Multiple choice A firm in perfect competition is a price taker because there are no good substitutes for its good. they are profit maximizers. it is very large. many other firms produce identical products. Under what condition would a perfectly competitive firm who is incurring an economic loss temporarily stay in business? if the total revenue is positive if the total revenue exceeds the variable cost if the total revenue exceeds the fixed cost if the total revenue is increasing When firms in a perfectly competitive market are making earning an economic profit, in the long run, firms will exit the market. firms will continue to earn a profit. average cost will shift downward. firms will enter the market.The following relations describe monthly demand and supply for a wheat Qp = 32 – P Qs = P- 16 where P is the price (in cents) per pound and Q is the quantity (in millions) of pounds. What is the equilibrium price and output level? (a) Suppose that wheat industry is a perfectly competitive industry consisting of a large number of identical firms. For a typical firm, the cost function is TC = 100 + 1000q². (b) Identify the marginal revenue of a typical firm in the industry. (c) (d) Find the profit maximizing level of output produced by a firm. If all firms are profit maximizing, then how many firms can operate in this industry?