You are the manager of a firm that sells a “commodity” in a market that resembles perfect competition, and your cost function is C(Q) = 2Q + 3Q2. Unfortunately, due to production lags, you must make your output decision prior to knowing for certain the price that will prevail in the market. You believe that there is a 70 percent chance the market price will be $200 and a 30 percent chance it will be $600. a. Calculate the expected market price. b. What output should you produce in order to maximize expected profits? c. What are your expected profits?

Q: A firm with two plants, A and B, has the following estimated demand and marginal cost functions: Qd…

A: Marginal cost is the additional cost incurred to produce an additional unit of output .

Q: Suppose a firm has the cost function C = 100+2q2 in a perfectly competitive market. Suppose price…

A: Given  Cost function = 100+2q^2 P = 20 a) In a perfect competition market  P = MC  MC = derivative…

Q: If a firm faces the Marginal Cost schedule MC = 180 + 0.3Q2 and the MR schedule is MR = 540 = 0.6Q2…

A: A firm can maximize its profit by producing at an output where marginal revenue (MR) = marginal cost…

Q: Questions 21-25 relate to the following information. Suppose a firm faces demand function…

A: Given, Demand function P(q)=200-q Cost function C(q)=100+3q2

Q: Assume a competitive industry is initially at its long-run equilibrium, given the inverse market…

A: a) New equilibrium 35000 - 0.2Q = 5000 + 0.3Q 0.5Q = 30000 units Number of firms =  New firms…

Q: Assume that marginal revenue equals rising marginal cost at 100 units of output. At this output…

A: The profit-maximizing level of output is obtained at the point where the marginal cost equals the…

Q: The marginal cost of supplying another unit of output of an electronic product on the internet is…

A: Marginal cost is the cost incurred on one additional unit produced as output

Q: In a price-taker market, if a business produces efficiently (i.e., that is, where marginal revenues…

A: A perfectly competitive market is also known as a price taker market because perfect competitive…

Q: You are the manager and selling your product in a perfectly competitive firm market. Your firm and…

A: Here, it is given that a firm operates its business in the perfectly competitive market with market…

Q: Question 17 True/Fals:  In the short run, if a firm is making losses, it can exit the market. Group…

A: The break even point is defined as the point at which the company is profitable but not losing…

Q: ) Suppose a firm is trying to decide whether to temporarily shut down to minimize its total  loss.…

A: Perfectly competitive market: - it is a market condition where there are many buyers and many…

Q: In a competitive market, the long-run demand is given by P = 20 - (0.01)*q Firms in the industry…

A: Given information Long run demand function P = 20 - (0.01)*q Cost function C = q3 - 5q2 + 10q

Q: You are the manager of a bakery that produces and packages bran buns. According to the new research,…

A: Inverse demand function, P = 4 – 0.5Q Cost function, C(Q) = 1Q

Q: Suppose that there are 90 firms in a market, each with the following cost function: C(q) = 11 + 5q².…

A: We first derive the individual supply curve, Cost firm bears, C(q)=11+5q2 Firm will sell at the…

Q: Consider a perfectly competitive firm in the following position: output = 4000, market price = $1,…

A: There are two possibilities to answer this question either option 'a' or option 'd'  but  we ensure…

Q: Assume the market price in a complete market is $12, the current output of company A is 50 pieces,…

A: Profit maximization is that the method by that an organization determines the valuation, input, and…

Q: You are the manager of a firm that sells a “commodity” in a market that resembles perfect…

A: There is a 70 percent chance the market price will be $200 and 30 percent chance it will be $600.…

Q: Suppose that there are 40 firms in a market, each with the following cost function: C(q) = 44 + 3q².…

A: Given: C(q)=44+3Q^2 D(p)=1260-25p

Q: Suppose that the firm operates in a perfectly competitive market. The market price of his product is…

A: The perfectly competitive market is a market type which is characterized by a large number of buyers…

Q: You are the manager and selling your product in a perfectly competitive firm market. Your firm and…

A: Given C(Q) = 50 + 10Q + 2 Q2, MC = Change in Total Cost/ Change in Output      = 50 + 10Q + 2 Q2 / Q…

Q: You are an accountant for a manufacturer of radios. The demand function for the tablets is p =40 −…

A: The monopoly profit is maximized where the MR =MC. There is single firm in the monopoly market and…

Q: In a highly competitive market, we generally find very low Lerner Index values. Those market are…

A: Learner index: It is used to measure the market power of firms. Its value ranges between 0 to 1. It…

Q: Suppose a competitive firm operation under the following conditions: price of output is $20, the…

A: The best or optimum level of output of the firm is given at the point where P or MR = MC. At this…

Q: Suppose that the manager of a firm operating in a competitive market has estimated the firm’s…

A: Given: Firm's average variable cost (AVC) = 10 - 0.03Q + 0.00005Q2  Total Fixed Cost (TFC) = $600…

Q: The cost function for a firm is given by C(Q) = 5+q^2. If the firm sells output in a perfectly…

A: Given: C(Q) = 5+q2 P=$20 In perfectly competitive market all the firms are price takers. Therefore,…

Q: Suppose that the manager of a firm operating in a competitive market has estimated the firm's…

A: Average variable cost(AVC) tells us how much a business company spends on its variable inputs( such…

Q: A sandwich shop owner has the following information: P = MR = $4, ATC = $2, AVC = $1, MC = 4, and Q…

A: The profits , the amounts by which business revenue surpasses costs of operations , is the main…

Q: Suppose the cost function for a firm is given by C(Q) = 100 + Q2. If the firm sells output in a…

A: In a perfect competitive market all firms are price taker and keep their price level equal to the…

Q: If the California state government imposes heavy taxes 'and' more costly regulations on a business…

A: As per the law of supply, price has a direct relationship with quantity supplied.

Q: A perfectly competitive firm sells its good for $20. If marginal cost is four times the quantity…

A: Perfectly competitive market refers to the market structure in which there are large number of…

Q: Suppose you are the manager of a watchmaking firm operating in a competitive market. Your cost of…

A:

Q: A firm's short-run production function is q=3L0.2 , while its cost function is C = 2L. Furthermore,…

A: 6.1 Find the value of the firm’s profit when L = 50. Given that:   q=3L0.2 C = 2L. L = 50 6.2…

Q: Suppose the daily demand function for pizza in St. Catharines is Qd = 1525 – 5P. For one pizza…

A: Given, Qd = 1525 − 5P C(q) = 3q+0.01q2 MC = 3 + 0.02q

Q: Assume a firm's marginal costs are increasing at its current level of output. If a firm's marginal…

A: Marginal costs are the costs that measure the change in the total cost of production when the…

Q: our cost of production is given by

A: Price of a watch is ​$100 The marginal cost of​ production, MC(q)​, is 4​q Since this is a…

Q: You are the manager of a firm that sells a “commodity” in a market that resembles perfect…

A: Answer in step 2

Q: A firm is producing computer monitors. The market price per monitor is P1=$450. The cost function is…

A: we have new price =$130 cost function =C(Q)=1,500+2.8Q2 so, marginal cost (MC) = 2.8x2xQ=5.6Q so,…

Q: Managers of firms with market power should be cautious not to ________ when they are earning…

A: In a market with less competition, firms enjoy some market power as they can have a specific…

Q: Refer to Figure 12-11. Suppose the prevailing price is $20 and the firm is currently producing 1,350…

A: Answer: Given that:           Suppose the prevailing price is $20 and the firm is currently…

Q: Suppose that there are 90 firms in a market, each with the following cost function: C(q) = 65+4q2…

A: Firm's total cost: C = 65+4q2  Market demand: D = 1260 - 39p

Q: true or false? The sufficient condition for profit maximization must be satisfied that MC cuts MR…

A: The market system in which several companies sell the same homogeneous products is known as perfect…

Q: Bitcom, a manufacturer of electronics, estimates the following relation between marginal cost of…

A: "Since you have asked a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Suppose an avocado farm has cost C= 0.004q + 28q + 1250, (where q is measured in bushels) and the…

A: A competitive market consist of large number of small firms and industry that determines price…

Q: Suppose jumbo packs of notepads are sold in a perfectly competitive market for $20. To produce jumbo…

A: In perfect competition market profit maximization condition is where price is equal to marginal…

Q: foreign used car dealership which sells the 2020 Toyota Aqua Hybrid. His total cost function is…

A: in a competitive market there are large number of firms producing identical products thus acting as…

Q: Multiple Choice : O. earning a normal profit . O. earning an economic profit . O. generating a loss…

A: When calculating profit margins, explicit and hidden costs are considered; one way of looking at…

Q: A firm's short-run production function is q = 3L0.2, while its cost function is C = 2L. Furthermore,…

A: Given: q=3L0.2 C=2L p=40 L=50