Joshua owns a small boat and catches lobster off the coast of Maine. His weekly cost function is TC(q) = 40 + 5q + 5q2. He sells his lobsters to the local wholesaler at the market price p %3D (in dollars). a) Find Joshua's short-run supply function for lobsters. (Hint: In this case short-run marginal cost is the same as long-run marginal cost.) b) Find Joshua's long-run supply function for lobsters. c) Find Joshua's shutdown price and Joshua's breakeven price (the price at which profit equals zero). d) Suppose the market price is $30, calculate his profit. What will Joshua do in the long run? Explain.
Q: A firm’s marginal cost curve above the average variable cost curve is equal to the firm’s individual…
A: The marginal cost defines the cost that a producer incurs to produce an additional unit. After a…
Q: Assume a firm's short-run cost function is given by the following expression: C (q) = 2 + q + q² %3D…
A: The cost function represents the relation between the cost incurred and the quantity of goods…
Q: The market price a perfectly competitive firm has to take is pm and the total cost to the firm is…
A: TC = aq + Bq2 + y Price = Pm Equilibrium in a perfectly competitive market occurs when price set…
Q: Given that the total cost= the firm is q=150P+30. 1 59³ − 0.2q² + q +40, the short-run supply…
A: We have given cost function and a firm produces output where P=Mc
Q: The cost function for a firm is given by CQ) = 5 + Q If the firm sells output in a perfectly…
A: Perfectly competitive market: - it is a market condition where there are many buyers and many…
Q: A competitive firm uses two variable factors to produce its output, with a production function y =…
A: A firm in its initial days must determine the amount of output it must produce before turning…
Q: Suppose a firm has the following total cost function TC = 100 + 2q2. If price equals $20, what is…
A: A firm sets the price and quantity at the point where marginal revenue is equal to the marginal…
Q: Q5: If the marginal cost (MC) of a firm is a function of output, C'( Q) = 10e0.5Q , and if the fixed…
A: If we have the marginal cost function, we can integrate to find the total cost. MC= 10e0.5Q…
Q: A firm can sell its output at the price p=10 per unit. The firm’s cost function is C=16+q2 To…
A: Given: P=10 per unit Cost Function : C=16+q2
Q: Mathematical Economics If fixed cost are 20, variable cost per unit are 2 and the demand function is…
A: here we calculate the profit , by reducing the cost from revenue , and by using the given…
Q: Consider a firm minimising the cost of production under the following Cobb-Douglas production…
A: Given information q = KL -----------> Production function Where q is output level, K is the…
Q: Randall Cars repair Factory has the total Cost Function TC (Q) = 4₁1 Q¹+ 26/Qx+30 where Q stands for…
A:
Q: A firm's short-run cost function is given by: C (q) = 50 + 10g – 6q² +q? What is the lowest the…
A: Given: Cost function: =50+10q-6q2+q3 To find: lowest price
Q: Marginal cost is given by the function :- 2Q2 - 130 And the equilibrium quantity is 10 so…
A: # Marginal cost measures the degree of change taking place in total cost of the firm.
Q: An ice cream company finds that at a price of $4.00 for each pint, they can sell 4000 pints of ice…
A: A demand function expresses the relationship between quantity demanded of a good and its price. An…
Q: The cost function for Acme Laundry is: TC(q)=10+10q+q^2 so its marginal cost function is:…
A: A competitive firm realizes highest profits at an output level where market price coincides with the…
Q: A firm has two plants with marginal costs: MC1(y )=3y+2 and MC2(y )=8y. Assuming that the firm is a…
A:
Q: The price-demand equation and the cost function for the production of active styluses are given,…
A: We know, e = -20(P/9400- 20P) If price = $150, we have elasticity as: e = -20(150/9400 - 3000) e =…
Q: Assuming that your firms total cost function is, TC (Q) = $21,128+4Q profits when the prices are $7,…
A: In the question, the total cost is TC = 21128 + 4Q and prices are $7, $9, and $11. Now we are…
Q: The inverse demand for tea is given by P= 8 – 0.03Q, where Pis the price per a gram of tea and Q is…
A: Both shop have same cost structure and therefore their reactions function and the output are going…
Q: Define Q to be the level of output produced and sold and assume that the firm’s cost function is…
A: Profit maximization is the situation in which the marginal revenue equals marginal cost. It means a…
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: Suppose a bakery’s fixed cost is the rent it pays for its location in a strip mall. Since firms have…
A: Fixed cost refers to those cost that are incurred without any production. In other words, fixed…
Q: The demand equation for a product is p= a– bq and the cost function is C(9) = kq² – rq where p is…
A: At equilibrium Marginal revenue is equal to marginal cost. Firstly we calculate marginal revenue…
Q: The demand function for a firm is; Qd = 122,000 - 500P + 4M +10,000PR where, Qd is quantity…
A: Firms profit maximization point is achieved where : Marginal Revenue = Marginal Costs
Q: A firm's short-run cost function is given by: C(q) = 50+10q-6q2+q3
A: Answer: Given that: A firm's short-run cost function is given by: C(q) = 50+10q-6q2+q3…
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: The demand curve for Blivets has the formula P =h(q) = 12-4q Where q is measured in thousand of…
A: The revenue is the total amount of money which can be made from selling all the units of output. The…
Q: The demand equation of a certain product is p=90-q-q². The total cost function is c=50+q-0.1q². Find…
A: Profit refers to the portion of the total revenue that is left to a producer once all factor inputs…
Q: A firm has a linear demand function for its product. When the price of the product is Sh.220, the…
A: The demand function shows the relationship between price and quantity demanded. There is a negative…
Q: Consider the following cost function: Total Cost = 50+5Q^3 and demand curve Price= 5000-275*Q Given…
A: The profit is maximum at MR=MC MR=5000-550Q ....... An MR curve is double sloped than an inverse…
Q: )A firm selling in a perfectly competitive market where the ruling price is £20 can buy inputs K and…
A: Profit refers to the gap between the total revenue and cost of a firm. Profit function: π=P*Q-TCTC =…
Q: Suppose the production process for running shoes is given by q = 10KL where q is the number of pairs…
A: A production function in economics describes the technological relationship between the quantities…
Q: A company manufacturing laundry sinks has fixed costs of $100 per day but has total costs of $2,500…
A: The total cost of production for the firm refers to the monetary value of the inputs used by the…
Q: Lakes region in New York State produces wine. The climate favors white wines, but reds have been…
A: A fixed cost is the cost that does not change with output. It remains fixed throughout the period…
Q: Jack's car repair factory has the Total Cost function TC(Q)=3.30³-540-8 where Q stands for the…
A: Cost Function The functional relationship between cost and output is referred to as the cost…
Q: computer retailing company specializes in the sale of jump drives to community college udents. The…
A: Given : Demand Function : p=2x2+10x+1000 Average Cost Function : c¯=2x2+36x-1600-20x
Q: The market for drones is perfectly competitive. Assume for simplicity that fractions of everything,…
A: The average total cost is calculated by total cost divided by the total quantity produced. ATC = TC…
Q: f the average cost function of a good is AC = 2Q + 6 + 13 Find an expression for MC. If the current…
A: AC(average cost) is the TC(total cost) divided by Q(quantity). MC(marginal cost) is the change in TC…
Q: Joey operates a lemonade stand. His cost of the lemons, sugar, and water per 8 oz. glass is $0.15.…
A: The total cost of a firm is determined not just by the fixed costs but also the marginal costs of a…
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: Consider a firm with technology given by the production function y=K¹/2¹/2 The firm can by factors…
A: Total cost is the cost of total fixed cost and the total variable cost , and the for the production…
Q: A competitive firm uses two variable factors to produce its output, with a production function y =…
A: Y = min(x1,x2) P(x1) = w1 = $8 P(x2) = w2 = $5 Q ≤ 10 , FC = $80 Cost function = 13q + 80 Minimum…
Q: (i) If the demand curve for a particular commodity is p = −0.09x + 51 and the total cost function…
A: Given, Demand function:
Q: The inverse demand for tea is given by P= 10 – 0.04Q, where Pis the price per a gram of tea and Qis…
A: In Cournot duopoly two firms compete in quantity and maximize profit by producing at MR =MC
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- The inverse demand for tea is given by P= 10 – 0.04Q, where Pis the price per a gram of tea and Qis the total number of grams of tea brought to market. There are two tea shops in the market. Shop 1's cost function is given by C = 0.01q,?, where qı is the number of grams of tea it brings to market. Shop 2's cost function is given by C2 = 0.01q2², where qp is the number of grams of tea it brings to market. Given that the two shops compete by setting output (Cournot), answer the following. a) Identify shop 1's reaction function to shop 2's output to within 2 decimal places (e.g. 0.33). 91= Number - Number 92 b) Identify shop 2's reaction function to shop 1's output to within 2 decimal places (e.g. 0.71). q2= Number Number 91 c) To within two decimal places (e.g. 0.63) what is the equilibrium output level of each shop and the equilibrium per gram price for tea. Shop 1 will produce Number grams of tea and shop 2 will produce Number grams of tea. The equilibrium market price is £ NumberThe inverse demand for tea is given by P = 8 – 0.03Q, where Pis the price per a gram of tea and Q is the total number of grams of tea brought to market. There are two tea shops in the market. Shop 1's cost function is given by C = 0.02q,?, where q, is the number of grams of tea it brings to market. Shop 2's cost function is given by C2 = 0.02q22, where q2 is the number of grams of tea it brings to %3D %3D market. Given that the two shops compete by setting output (Cournot), answer the following. a) Identify shop 1's reaction function to shop 2's output to within 2 decimal places (e.g. 0.33). 91= Number Number 92 b) Identify shop 2's reaction function to shop 1's output to within 2 decimal places (e.g. 0.71). q2= Number Number 91 c) To within two decimal places (e.g. 0.63) what is the equilibrium output level of each shop and the equilibrium per gram price for tea. Shop 1 will produce Number grams of tea and shop 2 will produce Number grams of tea. The equilibrium market price is £…In a fishery the long-run harvest function (harvest volume) is H(E) = aE – bE?, with a, b representing positive constants and E is fishing effort. Total cost is TC(E)= cE,with c being the unit cost of effort. Total revenue is TR(E) = pH(E), with p being the constant price of fish. Explain why higher levels of effort (E) beyond a certain point are associated with reductions in long-run total revenue (TR). Explain why it generally is not efficiency- maximizing for society to supply the level of fishing effort that maximizes the sustainable yield.
- The market for smart thermostats has grown increasingly competitive. Producers of smart thermostats all rely on the same technology and face the same costs. The cost function for a smart thermostat producer is given by the following function: c(y)=-10y+2003 where y stands for the number of smart thermostats produced and sold in a month. 2nd attempt Suppose the market demand for smart thermostats in any month is given by QD = 305 - p. In the long-run equilibrium, we would expect to find firms in the industry. See HintSuppose a firm engaged in the illegal copying of DVD’s has a daily short run total cost function given by: STC = (q^2)+25 If pirated DVD’s sell for $20, how many will the firm copy each day? What will its profits be? What is the firm’s short run producer surplus at P=20? Develop a general expression for this firm’s producer surplus as a function of the price of pirated DVD’s.Suppose that the cost of producing q appliances is C(q) = 500 – 4q + q? and the demand function is given by p = 14 – 2 q. The quantity that minimizes the average cost function and the corresponding price are g= 22.36 and p= -30.72 a) Why the corresponding price is negative? explain The maximum profit would be -473 b) Why the maximum profit is minus? explain what happens
- The cost function for Acme Laundry is: TC(q)=10+10q+q^2 so its marginal cost function is: MC(q)=10+2q where q is tons of laundry cleaned. Derive the firm's average cost and average variable cost curves. What q should the firm choose so as to maximize its profit if the market price is p? How much does it produce if the competitive market price is p = 50?b Now suppose Q = 2L +3K. Let the market price of L be w = 5 and the price of K be r = 4. Let both L and K can vary with production. Compute the input demand functions as a function of Q. (4 Points) c Calculate the marginal cost and average cost of the above function in subpart (b). Show them graphically. At what prices of textile will the producer shut down production. (3 Points) d Now suppose Q = 10LK. The market prices of inputs are as in subpart (b) above. Compute the input demand functions as a function of Q. Find the optimal production when the price of textile is $10 per yarn. (5 Points)The cost function for Acme Laundry is C(q) = 50 + 30q +q?, where q is tons of laundry cleaned. What q should the firm choose so as to maximize its profit if the market price is p? The output level at which the firm's profit is maximized as a function of p is q =|- (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a fraction can be created with the / character.) If p= 60, then Acme Laundry should produce| units. (Enter your response as a whole number.)
- The cost function for Acme Laundry is: TC(q)=10+10q+q^2 so its marginal cost function is: MC(q)=10+2q where q is tons of laundry cleaned. Derive the firm's average cost and average variable cost curves. What q should the firm choose so as to maximize its profit if the market price is p? How much does it produce if the competitive market price is p = 50?What would it look like in excel?11.2 The cost of producing x teddy bears per day at the Cuddly Companion Co. is calculated by their marketing staff to be given by the formula C(x) = 100 + 36x − 0.01x2. (a) Find the marginal cost function C'(x). C'(x) = Use it to determine how fast the cost is going up (in $) at a production level of 100 teddy bears. $ per teddy bear Compare this with the exact cost of producing the 101st teddy bear (in $). The cost is increasing at a rate of $ per teddy bear. The exact cost of producing the 101st teddy bear is $ . Thus, there is a difference of $ . (b) Find the average cost function C, and evaluate C(100) (in $). C(x) = C(100) = $ per teddy bear What does the answer tell you? The average cost of producing the first hundred teddy bears is $ per teddy bear.The function D(p)D(p) gives the number of items that will be demanded when the price is p. The production cost, C(x)C(x) is the cost of producing x items. To determine the cost of production when the price is $8, you would: A.Solve D(C(x))=8D(C(x))=8 B.Evaluate C(D(8))C(D(8)) C.Evaluate D(C(8))D(C(8)) D.Solve C(D(p))=8