Each firm in a competitive market has a cost function of C= 10q – 49° + g°. There are an unlimited number of potential firms in this market. The market demand function is Q= 34 - p. 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.)
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- 20 10 MO 0 10 MR Demand 20 30 40 10 00 70 QUANTITY (Thousands of jackets) 00 100 Because this market is a price-searcher market, you can tell that it is in long-run equilibrium by the fact that Furthermore, the quantity the firm produces in long-run equilibrium is s the efficient scale. P> ATC MR MC PATC MR > MC at the optimal quantity,The figure below shows the supply and the demand for a good (left) and the cost curves of an individual firm in this market (right). Assume that all firms in this market, including the potential entrants, have identical cost curves. Initially, the market is in equilibrium at point A. Price Cost MC ATC A 4 2 1 D 2 4 6 8 10 12 Quantity Quantity Refer to the figure above. Suppose that the market has reached the long-run equilibrium. Then, due to news of the product's defects and recall, the demand falls by 4 units at each price. At the new equilibrium, each firm in the market earns and there will be a. zero economic profit; neither entry nor exit of firms b. positive economic profit; entries of new firms C. zero accounting profit; both entry and exit of firms d. negative economic profit; exit of existing firmsThe handmade snuffbox industry is composed of 100 identical firms each having short-run total costs given by , where q is the output per day.20.5105STCqq=++(a) What is the short-run supply curve for each firm? What is the short-run supply curve for the market?(b) Suppose the demand is given by . What will be the equilibrium (both quantity and 110050QP=-price) in this marketplace? (c) What will each firm’s short-run profits be?
- The graph below depicts the cost structure for a firm in a competitive market. Use the graph to answer the following questions. Figure 14-2 Price PPPP Q₁Q₂ MC AVC ATC Quantity Refer to Figure 14-2. When price rises from P ₂ to P 3, the firm finds that All of the above are correct. marginal cost exceeds marginal revenue at a production level of Q₂. it earns normal or zero profit. O if it produces at output level Q3 it will earn a positive profit.you are an accountant for a manufacterer of radios. the demand function for the tablets is p= 40-4x2 where x is the number of tablets produced in millions. it costs the company $15 to make a tablet. write an equation for the manufactures profit as a function of the number of tablets produced. the company currently produces 1 million tablets and makes a profit of $21000000, but you would like to scale up production a bit, what greater number of tablets could the company produce to yield the same profitQ.5 A firm is making two products A & B. Each unit of A incurs a cost of production to the tune of $150 and that of B incurs a cost of $200. Product A earns a profit of $15/unit and B gets $20/unit. The estimated monthly demand of both A & B is at maximum 500 units. Monthly production budget is set at $50,000.How many units of A & B should the firm make in order to maximize profit. Conduct sensitivity analysis and answer the following questions: 1. State the optimal solution. 2. What is the objective function value? 3. Find out the range of profit for A in the objective function for which the above solution remains optimal. 4. Which constraint/s is/are binding? 5. Interpret the shadow price for production budget.
- The cost per unit of producing a product is 60 + 0.2x dollars, where x represents the number o produced per week. The equilibrium price determined by a competitive market is $220. a) How many units should the firm produce and sell each week to maximize its profit? What is the maximum profit?For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down, it will produce. (Hint: You can select the purple points [diamond symbols] on the graph to see precise information on average variable cost.) Price Quantity Total Revenue Fixed Cost Variable Cost Profit (Dollars per air freshener) (Air fresheners) (Dollars) (Dollars) (Dollars) (Dollars) 10.00 44,000 16.00 44,000 40.00 44,000 If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's fixed cost is $44,000 per day. In other words, if it shuts down, the firm would suffer losses of $44,000 per day until its fixed costs end (such as the expiration of a building lease). This firm's shutdown price-that is, the price below which it is optimal for the…Consider the competitive market for copper. 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. (?) 80 72 04 55 ATC y 40 D 32 10 AVC 8 MC 0 0 6 18 21 24 30 QUANTITY (Thousands of pounds) The following diagram shows the market demand for copper. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (Hint: You can disregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 40 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 60 firms. (?) 80 72 Supply (20 firms) 64 Demand 58 33 Supply (40 firms) 40…
- Consider the attached diagram of a competitive market and the typical firm operating in that market. In the long run, what total amount of the product will be supplied in equilibrium? [Hint: what amount do consumers demand at the long-run price?] Price 28 24 20 500,000 700,000 D Price, costs 60 66 78 MC ACThe soybean industry is a constant cost industry. A new study revealing negative health effects of soymilk permanently decreases the number of buyers in the soybean market. Due to the decrease in demand, the equilibrium price of soybeans ______ in the long run, the equilibrium quantity of soybeans ______in the long run, and the number of firms in the market will _____ in the long run. Word Bank: Decreases, Decreases, Decreases, Increases, Increases, Increases, does not change, does not change, does not change.Suppose that the market for polos is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. (? 50 45 40 35 30 ATC 25 20 15 AVC 10 MC 2 4 10 12 14 16 18 QUANTITY (Thousands of polos) PRICE (Dollars per polo) 20