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
Q: Changing the slope of the Phillips curve: Suppose the slope of the Phillips curve the parameter…
A: According to the philips curve, inflation and unemployment have a connection that is opposite to one…
Q: Suppose that Dent Carr's long-run total cost of repairing s cars per week is c(s) = 4s² + 12 for s>0…
A:
Q: A firm's production function is Q = 6L² - 0.2L³ Where L denotes the size of the workforce. Find the…
A: The marginal product of labor is the increase in output caused by the addition of a new unit of…
Q: In the Keynesian cross model, assume that the consumption function is given by C = 20 + 0.8(Y- T).…
A: The change in C(consumption) due to a change in Y(income) is known as MPC(marginal propensity to…
Q: For a country's economy as a whole, consumption is a linear function of its national income as…
A: Consumption is a linear function of its national income. i.e., C = Ca + MPC * (Y) Where C is the…
Q: 6. Deriving the short-run supply curve The following graph plots the marginal cost (MC) curve,…
A: Shut down point for a firm is where the price level offered to producer is lesser than the average…
Q: A routine item has a profit impact, supply risk. O High profit impact, high supply risk. O Low…
A: Check below mentation step for answer
Q: Beowoof is the only kennel for two neighboring counties, East Liverpoodle and West Liverpoodle. The…
A: Price elasticity of demand is the responsiveness of quantity demanded change due to change in price.…
Q: 4. Consider the following utility function of a consumer: u(x₁, x₂) = a ln x₁ + (1 - a) ln x₂ where,…
A: Engle Curve: Engle curve for a good shows different combinations of demand for the good and…
Q: 1. Why is it important to study and learn the concept of globalization?
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Document E: Analyze how much we should worry about the national debt. (we should worry a little/we…
A: The term "national debt" is used to allude to a country's unpaid financial obligations.Depending on…
Q: H + 3 Suppose the market for widgets in Freedonia is perfectly competitive. Demand for widgets in…
A: At the equilibrium Quantity demanded = Quantity supplied 100 - P = -20 + P 120 = 2P P = 60 Q = 40…
Q: Draw and label both graphs and show the economy in a recession. Use the money market graph to show…
A:
Q: A man who won P300,000 in a lottery decided to place 50% of his winning in a thrust fund for the…
A:
Q: According to "Freightened: The Real Price of Shipping," a solution to the problems with the shipping…
A: Frightened: The Real Price of Shipping is the hidden cost of the shipping industry.
Q: In this table, the fixed cost of production is:
A: Costs of production, which comprise expenses of many kinds, are incurred during the production of…
Q: 26.A man borrowed P20,000 and promised to pay an amount of P21,500 with simple interest of 20%. How…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: The domestic demand and supply for oranges in Canada is outlined in the graph. The world price is $7…
A: A country imports when the domestic demand is greater than the domestic supply at the prevailing…
Q: 2. 0 Quantity 1 2 Polly's Piñatas has a local monopoly in the sale of piñatas. The table below shows…
A: Monopoly is a market circumstance wherein there is just a single seller of a product with boundaries…
Q: A risk-averse manager is considering a project that will cost £100. There is a 10 percent chance the…
A: Introduction: The expected value is described as the difference between expected profits and…
Q: Suppose Matt’s income is $120. He plans to spend it on two goods bread and avacado. Prices are: Pb…
A: The combination of goods and services that a consumer can receive for his or her limited budget is…
Q: If a company purchases an equipment for $P and uses it for N years, and the compaany's MARR is i%,…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: 3. Consider a two-player, sequential-move game where each player can choose to play right or left.…
A:
Q: Write an expression for marginal utility for good 1, marginal utility of good 2, and the marginal…
A: Q4. A utility function describes the willingness of a consumer to consume a particular consumption…
Q: Patty’s Patties produces frozen hamburger patties that are sold in stores across the country. Assume…
A: In economic theory, perfect competition happens when all organizations sell identical products,…
Q: The Fed has conducted expansionary monetary policy to combat a recession but is running up against…
A: An expansionary monetary policy basically refers to a type of macroeconomic monetary strategy that…
Q: Consider the following principal agent problem with adverse selection. A firm faces a worker who may…
A: An agent may act in a way that is contrary to the best interests of the principal. Thus,…
Q: evelop all of the mutually exclusive bundles from independent projects identified as A, B, and C.…
A: There are three projects, namely, A, B, and C that are independent of one another.
Q: c. Suppose that the demand for Molly's product increased by three units at every price level.…
A: A profit-maximizing firm uses its input efficiently to produce optimal output. The optimal output is…
Q: The table below presents production schedule of apples and bananas in the country of Boxtown -…
A: Opportunity cost is the cost of producing one good in terms of other. Opportunity cost shows the…
Q: A risk-averse manager is considering a project that will cost £100. There is a 10 percent chance the…
A: The expected value is described as the difference between expected profits and expected costs.…
Q: Banks are financial intermediaries that use the deposits of their customers, which are borrowers.…
A: The ease with which an asset can be converted into money is referred to as liquidity. The ability of…
Q: An industrial machine costing $10,000 will produce net cash savings of $4,000 per year. The machine…
A: The internal rate of return (IRR) is a measurement utilized in monetary examination to gauge the…
Q: Which of the following is an example of adverse selection a safe driver taking greater risk in a…
A: When one party deliberately takes risk because the risk is covered by insurance or some other…
Q: According to the uncovered interest parity theory, bond yields on riskless euro- denominated bonds…
A: A currency is said to be appreciated when its value rises in term of other currency. The…
Q: Refer to the following diagram of competitive equilibrium in the bread market: 4.5 Price (€) 4.0 3.5…
A: Demand and supply not only depends on the price of the commodity but also on many other factors…
Q: Trade Protectionist tools include all of the following except: Select one: a. Open Borders for…
A: Trade restrictions are any kind of barriers put in place to prevent the import and export of…
Q: In a college town, students choose between two providers of wireless internet access. All student…
A: Under a perfectly competitive market: A large number of buyers and sellers operate. All firms…
Q: An increase in the income tax rate (fiscal policy) will have no impact on the level of output or…
A: The proportion of household and business income that the government collects in taxes is known as…
Q: A risk-neutral competitive firm produces an output y, facing an unknown price, p. Its profits are…
A: Expected profit refers to the weighted sum of profits with their respective probabilities. To find…
Q: 7. Determinants of aggregate supply The following graph shows a decrease in short-run aggregate…
A: Aggregate supply : Aggregate supply, commonly referred to as total output, is the whole quantity of…
Q: 2- If a 3D printer increased in cost at exactly the inflation rate, what was the inflation rate if…
A: Inflation is the increase in price level over the no. of years. Inflation rate measures the change…
Q: Suppose Nickelmore Bank has $21100 in assets, and its net worth is $11000. What is the total value…
A: Assets are the resource that will provide future benefit. Liability is the amount that is unpaid…
Q: 15.4.1 When the Fed O buys; increase; increases Obuys: decrease; decreases sells; increase;…
A: Central bank changes the money supply by changing the discount rate and also by open market…
Q: Lea's utility function is U = In(x) + 0.8 y where x denotes her consumption of good X and y denotes…
A: Given, Utility Function: U=ln(x)+0.8y Per Unit Tax on Good X = $2 Price of Good X = $7 Price of…
Q: he economy of a country is a three-sector economy. Its public consumption follows the function: C…
A: Given Consumption function: C=400+0.8Yd Investment I=250 trillion Government spending G=IDR 700…
Q: Researchers have found that the income of obese women is about 17 percent lower than that of women…
A: A measure of body which is based on H(height) and W(weight )is known as Body mass index (BMI) .The…
Q: The following graph shows an economy in long-run equilibrium at point A (grey star symbol). The…
A: The Phillips curve shows that unemployment and inflation have a consistent negative relationship.…
Q: Thompson Lumber Company wants to decide if they want to expand their current product line by…
A: Under the Minmax regret rule, the alternative that needs to be chosen minimizes the maximum regret…
Q: find the Banzhaf Power Indices of that 4-player system: [10:8,7,4,2] A new republic with a…
A: Introduction The Banzhaf power index represents the likelihood that one state will affect the…
A5
5. Suppose the market is
(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
(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?
Step by step
Solved in 4 steps
- 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.A gizmo producer operates in a perfectly competitive market with a price of $100 for a can of gizmos. The gizmo producer has a marginal cost curve equal to 0.52q, where q is the number of cans of gizmos produced. The gizmo producer currently produces 192 cans of gizmos. Should the gizmo producer produce 193 cans of gizmos instead? No, the marginal cost of the 192nd box is above marginal revenue, so production is already too high. No, while the marginal cost of the 192nd box is below marginal revenue, the marginal cost of 3rd box is above it, so profit is already maximized. None of these answers. Yes, the marginal cost of the 192nd box is below marginal revenue, so production is too low, and profits are not maximized. 20 MacBook esc 20 F3 OOD F1 F2 F4 2$ W R tab 6 5 %A4 %# 3Suppose 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…
- Suppose 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.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?You are given the following information for a producer of organic grommets in a perfectly competitive market. TFC $8 Market price = $9 Quantity 1 2 3 4 5 6 MC ($) 8 7 6 8 10 13 The marginal cost of production appears in the table above. What is the profit-maximizing output? Is the firm making a profit or loss? How much? Output: (Click to select) $
- You are given the following information for a producer of organic grommets in a perfectly competitive market. TFC = $8 Market price = $13 Quantity MC ($) 1 10 2 8 3 9 4 11 5 14 6 18 The marginal cost of production appears in the table above. What is the profit-maximizing output? Is the firm making a profit or loss? How much?p= 130 - 2Q. The firm's cost curve is C(Q) = 20 + 6Q. What is the profit-maximizing solution? The profit-maximizing quantity is O. (Round your answer to two decimal places.) The profit-maximizing price is $. (round your answer to two decimal places.) What is the firm's economic profit? The firm earns a profit of $]. (round your answer to two decimal places.) How does your answer change if C(Q) = 100 + 6Q? The increase in fixed cost O A. causes the firm to increase both the price and quantity, and profit increases. O B. has no effect on the equilibrium price and quantity, but profit will decrease. OC. has no effect on the equilibrium quantity, but the equilibrium price increases and profit increases. OD. has no effect on the equilibrium quantity, but the equilibrium price increases and profit decreases.Assume 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…
- Yann's bakery operates in a perfectly competitive market where the prevailing price for a baguette (his only product) is $3. If Yann's marginal cost function is given by MC=0.1q: (i) Yann's profit-maximizing level of output is 3 (ii) Yann's variable profit is (iii) The producer surplus is If Yann also has a fixed cost of $50, then: (iv) his total profit is Assuming Yann cannot avoid the fixed cost, Yann shouldThe table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a purely competitive firm that produces novelty ear buds. Assume the market for novelty ear buds is a competitive market and that the price of ear buds is $6.00 per pair. Buddies Production Costs MC ($) Quantity of Ear Buds 5 10 15 20 25 30 35 40 2.00 2.45 3.55 4.00 5.50 5.98 8.52 pairs ATC ($) 2.00 2.00 2.15 2.50 2.80 3.25 3.64 4.25 Check my work Instructions: In part a, enter your answer as the closest given whole number. In parts b-d, round your answers to two decimal places. a. If Buddies wants to maximize profits, how many pairs of ear buds should it produce each week? b. At the profit-maximizing quantity, what is the total cost of producing ear buds? c. If the market price for ear buds is $6 per pair, and Buddies produces the profit-maximizing quantity of ear buds, what will Buddies profit or loss be per week? d. Now assume the market price is $5.50 per pair, and Buddies produces the…Assume that a firm in a competitive market faces the following cost information. If the market price for this firm's product is $40, calculate the profit maximizing level of output for this firm using marginal analysis. It may help to create your own cost table and fill in columns for Marginal Cost and Average Total Cost based on the Total Cost information below. a.What is the level of profit for this firm at the profit maximizing output? b.To convince yourself that the quantity you found is indeed the profit maximizing quantity, try calculating what the profit would be at the next higher level of output. What did you find? c. What do you predict will happen in this market over the long run?
