4. Suppose that any given individual firm in this same perfectly competitive industry has the following: ATC= 0.3q2 1.5q + 3+= MC = 0.9q2-3q +3 24 TC = 0.3q³1.5q² + 3q + 24 q Also, assume the market price is P* = 18. Find the quantity that the individual firm would produce at this price. Round your answer to the nearest whole number. Show work. You will have to use the quadratic formula.
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- 3.3 Frances sells pencils in the perfectly competitive pencil market. Her output per day and her costs are as follows: Variable Cost Output per Day Total Cost АТС AVC MC $1.00 2.50 1 2 3.50 3 4.20 4 4.50 5.20 6. 6.80 7 8.70 8. 10.70 a. If the current equilibrium price in the pencil market is $1.80, how many pencils will Frances produce, what price will she charge, and how much profit (or loss) will she make? (1)Suppose a firm in a competitive industry has the following cost curves: 10 4.5 3.5 9+ 8 7 6 3 ↑Price 2 1 2 3 4 5 MC ATC AVC + + 6 7 8 Quantity Refer to Figure 14-13. If the price is $6 in the short run, what will happen in the long run? a. Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry. b. Nothing. The price is consistent with zero economic profits, so there is no incentive for firms to enter or exit the industry. C. Individual firms will earn positive economic profits in the short run, which will entice other firms to enter the industry. d. Because the price is below the firm's average variable costs, the firms will shut down.The following graph shows the marginal cost curve for Oiram-46, a competitive firm producing magic hats. Suppose that currently, the prevailing market price is $1.50 per magic hat. On the following graph, use the blue points (circle symbol) to plot Oiram-46's price line. Then use the grey points (star symbol) to indicate the profit maximizing quantity of output produced by Oiram-46. TOTAL COST (Dollars) he 12 11 10 a 8 N 3 2 1 0 + Oiram-46 7 0 MC + H 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 QUANTITY (Magic hats per week) Based on the graph, Oiram-46's profit-maximizing quantity is Demand Profit maximizing quantity ? magic hats, average revenue is $ and marginal revenue is
- The following graph plots the marginal cost (MC) curve, average total cost (ATC) curve, and average variable cost (AVC) curve for a firm operating in the competitive market for snapback hats. COSTS (Dollars) 100 100 80 90 80 20 70 70 HD 50 40 30 20 0 11 D 10 O MC Price (Dollars per snapback) 15 15 20 25 55 70 85 201 ATC 0 D AVC O 50 60 70 80 QUANTITY (Thousands of snapbacks) For every price level given in the following table, use the graph to determine the profit-maximizing quantity of snapbacks for the firm. Further, select whether the firm will choose to produce, shut down, or be indifferent between the two in the short run. (Assume that when price exactly equals average variable cost, the firm is indifferent between producing zero snapbacks and the profit-maximizing quantity of snapbacks.) Lastly, determine whether the firm will earn a profit, incur a loss, or break even at each price. □ Quantity (Snapbacks) BO 100 ▼ On the following graph, use the orange points (square symbol) to…Assume that Harry Ellis produces table lamps in the perfectly competitive table lamp market. OUTPUT PER WEEK TOTAL COSTS AFC AVC ATC MC 0 $100 1 150 2 175 3 190 4 210 5 240 6 280 7 330 8 390 9 460 10 540 Fill in the missing values in the table. Suppose the equilibrium price in the table lamp market is $50. How many table lamps should Harry produce, and how much profit will he make? If next week the equilibrium price of table lamps drops to $30, should Harry shut down?Consider 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).
- MC ATC 24 P = MR 20 18 4 100 350 500 700 q Bales of hay from the graph of a perfectly competitive firm above, answer the following questions:# 1. What is the profit maximization level of of output? ( 2. What is the value of ATC at the best level of output? 3. what is the amount of profit the firm makes at that level of output? show your calculations. 4. At what price firm will breakeven В IA perfectly competitive market has a demand curve given by the equation Q = 2000 − 2p where Q is the market quantity demanded and P the price per unit. Each firm in the market has the total cost given by TC = 1000 + 100q + 10q' and the marginal cost MC = 100 + 20q If the current market price is $400, 1. Calculate the market quantity , profit and quantity maximizing profit for each firm and Graph your results. OK 2. Suppose that the market is in the long run.How much profit will each firm earn and what will be the market price and What is the market quantity and price ? 3 How many firms operate in this marketPerfect competition is an economic term that refers to a theoretical market structure in which all suppliers are equal and overall supply and demand are in equilibrium. Figure 23. 1 shows the price, marginal cost and average cost curves facing a perfectly competitive firm in the short run. Figure 23.1 Cost, pnce (Rand) B. R800 C. R960 20 D. R720 200 60 80 Output per day 100 MC AC What is the total revenue of the profit-maximising firm in the short run? A. R2 000 Price AVC @ K
- Figure 14-13 Suppose a firm in a competitive industry has the following cost curves: 10 9- 8 7. 6 اکیه 3.5 2 1- Price 1 2 3 4 MC 5 6 7 8 ATC AVC Refer to Figure 14-13. If the price is $2 in the short run, what will happen in the long run? ◆a. Individual firms will earn positive economic profits in the short run, which will entice other firms to enter the industry. b. Nothing. The price is consistent with zero economic profits, so there is no incentive for firms to enter or exit the industry. ● C. Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry. d. Because the price is below the firm's average variable costs, the firms will shut down. 45Suppose a firm in a competitive industry has the following cost curves: 10 9 8 7 6 5 4 3 2 1 Price + 1 + + + 2 3 4 5 MC ATC AVC P1 P2 P3 P4 + 6 7 8 Quantity Refer to Figure 14-13. If the price is P1 in the short run, what will happen in the long run? Nothing. The price is consistent with zero economic profits, so there is no incentive for firms to enter or exit the industry. Individual firms will earn positive economic profits in the short run, which will entice other firms to enter the industry. Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry. Because the price is below the firm's average variable costs, the firms will shut down.Consider the perfectly competitive market for titanium. 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. 100 90 80 70 60 50 40 АТС 30 20 AVC 10 MC O 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pounds) COSTS (Dollars per pound)