Long Run Equilibrium Consider a perfect competitive market with n identical firms. The cost functions of an individual firm are: The market demand is given by TC=q³ 4q² + 74q MC=3q²-8q+74. - P= 120-Q
Q: The following scenario examines markets for factors of production, which include land and labor,…
A: Land and labour are crucial production inputs. Depending on market variables such as supply and…
Q: What is generally the case for a monopolist's average revenue? Select one: O a. It is equal to…
A: In case of Monopoly there is a single seller who controls the entire market. The firm is the Price…
Q: What is the annual rate of interest if 235 is earned in 6 months on an investment of 12,691?
A: Annual percentage rate (APR) alludes to the yearly interest generated by a sum that is charged to…
Q: A high-tech material handling system was offered by a supplier to a large automobile manufacturer.…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: 3 Calculate the following limits. In each case, clearly state any facts or results you use (for…
A:
Q: a) What is the monopolist's profit maximising output? b) What is the monopolist's total revenue? c)…
A: A monopolist firm produces at the intersection of MR and MC to maximize profit. i.e., At MR = MC,…
Q: The Stag Hunt is a famous coordination game where two hunters must work together to hunt a stag but…
A: The stag Hunt game is also known as a common interest game. In this game, there are two…
Q: An investor is told that the following cash flow profile has a present value of $13,000 assuming…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: an group. are about what is right and what is wrong, acceptable or unacceptable to a particular The…
A: Part 1 The concept depicting what is right and what is wrong as well as what is acceptable or…
Q: Monopolization of either the labor market or the output market results in A. A higher output price…
A: Monopolization means when only a company produces a particular type pf product in the market. There…
Q: Vhee Ayar lives alone in a computer lab where it spends 10 hours per day producing spurious orrside…
A:
Q: people from accessing your good or service, then the can't provide it and still make a profit out of…
A: Public goods refer to goods having the following characteristics: Non-excludable: No consumer can…
Q: Two firms H and L have discrimination coefficients dH and dL, where dH > dL. Briefly explain the…
A: Discrimination refers to charging unequal prices or in other words using different conditions for…
Q: P = 225 4Q D P = 50+3Qs How much is producers' surplus generated when this market operates in…
A: Producer surplus is the area below price and above supply curve. Equilibrium is where demand curve…
Q: "BE11-11 Francis Corporation purchased an asset at a cost of $50,000 on March 1, 2014. The asset has…
A: Economic depreciation is a measurement of the decline in an asset's market value caused by…
Q: For each price in the following table, calculate the firm's optimal quantity of units to produce,…
A: Price Quantity TR FC VC Profit 25 30000 1600000 70 40000 1600000 100 45000…
Q: Why some oligopolistic firms try to collude to fix market prices?
A: Bertrand Duopoly model: This is an oligopoly model where 2 firms compete in the market. Here both…
Q: Assume that the production function for competitive firm is given by F(L)=9L1/3, where L is the…
A: Given information: F(L) = 9L1/3 --------> Production function. Where L is the number of units of…
Q: What happens when aggregate demand Increases? give examples in paragraphs
A: Aggregate demand is the summation of individual demand made in the economy for a given time.…
Q: A perfectly competitive industry has a large number of potential entrants. Short-Run total cost is…
A: Perfectly competitve market is a market place where there are many number of sellers and buyers and…
Q: Real-Time Data Analysis Exercise Using the data provided below, calculate the inflation rate from…
A: Inflation rate between Apr'21 and Apr'22 = (Price index in Apr'22 - Price index in Apr'21) / Price…
Q: Suppose the imaginary company of Roobek is a small, Jackson-based American apparel manufacturer…
A: Fixed cost is the cost that will incur even in the zero level of production. Total cost is the sum…
Q: 3. The wage rate is £10 and the capital rate is £20. If a firm was spending £c, show what…
A: An isocost line is the locus of input combinations for a particular cost outlay of the firm. A firm…
Q: Statement Between points A and B, curve II is unit elastic. Between points A and D, curve JJ is…
A: Elasticity simply represents the percentage or proportional change in one factor or variable due to…
Q: Five fishermen live in a village and have no other employment or income earning possibilities…
A: Marginal Cost refers to the change in the total cost of one extra unit of output produced.
Q: Dollar Bank is currently loaned up. If the required reserve ratio is lowered, Group of answer…
A: Dollar bank is currently loaned up. If the required reserve ratio is lowered then the required…
Q: The French fall in love with California wines and triple their purchases of this beverage. Assuming…
A: When a commodity's demand changes because of a price shift, the term "change in quantity demanded"…
Q: Determine the exact simple interest on 10,620 for the period from Jan 6 to Nov 28, 1992, if the rate…
A: Given Loan amount (P)=10,620 The interest period is between Jan 6 to Nov 28, 1992. Rate of interest…
Q: 8-37 which option should be chosen. A firm must decide which of three alternatives to adopt to…
A: Defending a challenger The investment that has the lowest investment is chosen as the defender,…
Q: Given market demand QD =50_p and market supply p =Qs +5 find the market equilibrium price and…
A: Demand for a good refers to the quantity of the good demanded at various price by the consumers…
Q: Q=40VKL, w=$50 and v-$50. We want to produce a Quantity of 1000. 1-What is the RTS? 2-How much K and…
A:
Q: 4. Explain whether each of the following events shifts the short-run aggregate-supply curve, the…
A: The total amount of goods and services that all consumers in the economy are requesting is referred…
Q: 8-2 A Construct a choice table for interest rates from 0% to 100% for two mutually exclusive…
A: Due to resource constraints, the investor is only able to choose one project. The incremental…
Q: 7:51 AM 0 Kb/s ← Image LTE... .... VOD LTE LTEⓇ 74% Assume the desired reserve ratio is 12 percent…
A: Money multiplier is a concept that refers to the number of times a the given deposit increases and…
Q: What is the difference between GDP and GNP? Is one a better measure of income/output than the other?
A: Gross domestic product is the sum of all the dollars produced in an economy over a given time period…
Q: At a price of $4.96 per pound, the supply for cherries is 16,253 pounds, and the demand is 10,364…
A: Equilibrium is where demand curve equals supply curve. Supply curve is upward sloping and hence…
Q: Two friends are deciding where to go for dinner. There are three choices, which we label A, B, and…
A: In game theory, using a game tree to describe a game is the most extensive method. The diagram…
Q: a. If the firm wishes to maximize its total revenue. at what price should it sell its pots? What is…
A: Elasticity refers to an economic concept used to calculate the change in the aggregate quantity…
Q: 0.5, Utility function is given as Cobb Douglas functional form: U = x1.5x2.5 Price the first good:…
A: Utility function : x10.5 x20.5 Price of good 1 : p1 = 5 Price of good 2 : p2 =10 Income = 500 Above…
Q: Weiss Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new…
A: The break-even point refers to the production level where both the total revenues and total expenses…
Q: The subprime mortgage crisis of the mid 2000s in the USA was a result of ... a. Increasing…
A: Subprime mortgages refers to the mortgages to borrowers that would not qualify for prime mortgages…
Q: Which of the following would NOT be considered a "nudge" to get people to quit smoking? Question…
A: Nudge will put efforts on the change of a person's choice context without imposition of any economic…
Q: A Company's stock currently pays a dividend of $5 dollars per year and you expect that dividend to…
A: Stock price is given by the formula : - Price = Dividend i - g i = interest rate g = Growth rate…
Q: When you pay $10 for chicken you ordered for dinner, you are using money as a(n) Group of answer…
A: Money performs many functons like it is used as a store of value, investment good, unit of account…
Q: In the following demand and Cost functions & is selling price and Qis quantity in the Thousand P =…
A: When the total revenue function and total cost function are already given, the profit function is…
Q: A majority of economists believe that in the long run, real economic variables and nominal economic…
A: Equilibrium refers to the goods market in the economy occurring where aggregate demand equals…
Q: Year Guns Produced Price of Guns Butter Produced Price of butter 2005…
A: Real GDP is the GDP that is measured by the price of the base year. Real GDP for 2011= Price of Guns…
Q: The table below shows hypothectical figures of revenue and spending for the Canadian government. For…
A: Net tax revenue will be calculated as tax revenue minus transfer payments. The transfer payments…
Q: Players 1 and 2 work together to produce an output with value X X= 12e1 +9e2 where e; is the effort…
A:
Q: In the following demand and cost functions & is selling ponce at Q is quantity in the Thousars P =…
A: Profit is maximized at the level where marginal revenue and marginal cost are equal. This is the…
D,E,F
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Short-run supply and long-run equilibrium Consiber the competitive market for rhodium. Assume that no matter how many firms operate in the induatry, every firm is identical and faces the same marpinal cost (MC), averapt total cost (ATC), and average variable cost (AVC ) curves plotted in the following praph. The following graph plots the market demand curve for thodium. If there were 10 firms in this market, the short-run equilibrium price of rhodium would be per pound. At that price, firms in this industry would. Therefore, in the long run, firms would the rhodium market. Because you know that competitive firms earn economic profit in the long run, you know the long-run equilibrium price must be per pound. From the graph, you can see that this means there will be firms operating in the rhodium industry in long-run equilibrium. True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns positive accounting profit. True FalseBe sure to label the graphs. Suppose in the competitive market for a good known as “Tovars” that there are 5,000 firms. Assuming each firm is at a point where P=ATC. Suddenly, a huge number of entrepreneurs enters the market so the number of firms increases by 1,000. a. Please draw a graph showing the short run effect. Please label the price and quantities initially as P1, q1, Q1 and the short run price and quantities as P2, q2, Q2 b. On the graph in a, please show the long run effect. Please label the long run price and quantities as P3, q3, Q3. Relative to the initial equilibrium (before the entrance of 1,000 firms), What happens to the P? What happens to the q? What happens to the Q?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 firms
- Suppose there are only two firms in a competitive market for a good. Firm 1's marginal cost curve is given by MC = 2.5 +0.5Q and the equation of 4+Q³. What is the equation of the - firm 2's marginal cost curve is MC supply function for this market? - a) MC = 6.5 +1.5Q⁹ b) MC = 0.33Q⁹ +3 c) Q³ = 3p - 9 d) P = 6.5 +1.5QsSuppose that the market for air fresheners is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this market. (? 40 36 Profit or Loss 32 28 24 АТС 16 12 AVC MC 4 4 8 12 16 20 24 28 32 36 40 QUANTITY OF OUTPUT (Air fresheners) PRICE AND COST (Dollars per air freshener) 201. Emad is a lettuce supplier in a perfectly competitive lettuce market in Kuwait. If the demand for lettuce in Kuwait is given by: Qo = 40,000 – 10,000P, Where Q is the quantity of lettuce boxes and P is the price of a lettuce box. In the short-run, Emad's has the following total cost function for his production of lettuce: TCimad = 0.25Q +Q +3 Assume that Emad is one of 1000 sellers in the Kuwaiti lettuce market with identical costs. Answer the following questions: e. wnat is tne market suppiy tunction in the short-run? 1. What is the short-run equilibrium price and equilibrium quantity in this market? g. Draw a rough sketch of the market demand and supply functions, showing the optimal point and all intersections with the horizontal and vertical axes. h. What is the demand function for Emad's lettuce in the short-run?
- Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. 72 16 AVC 16 24 40 QUANTITY (Thousards of jaats) For each price in the following tabie, use the graph to determine the number of jackets this firm would produce in arder to maximize its profie. Assume that when the price is exacty equal to the average variabie cost, the firm is indifferent between producing zero jackets and the proft-maximizing quandity. Also, indicate whether the fiem wil produce, shut down, or be indiferent between the two in the short run. Lastiy, determine whether e w make a prafit, suffer a loss, ar break even at each price. Price Quantity (Dollars per jacket) (Jackets) Produce or Shut Down? Profit or Loss? 4 12 36 48 60Suppose XYZ sells widgets in a competitive market. Suppose that, when the quantity of production is 10 units, XYZ's: • marginal profit is $3 • average variable cost is $9 • average total cost is $11 • average fixed cost is $2 • average revenue is $15 What is XYZ's marginal cost when the quantity of production is 10 units? tities20 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,
- Given the information presented in the following graph, which of the following is an accurate statement? Price Po 0 ATC AVC m 20 MC DD Quantity Because this is a perfectly competitive firm, the profit maximizing rule is not P = MC, Profits will be reduced by expanding production to the zone where MC exceeds MR. Because this is a perfectly competitive firm, the profit maximizing rule is not P = MR. Production should keep expanding because MR is always less than MC.The following problem traces the relationship between firm decisions, market supply, and market equilibrium in a perfectly competitive market. a. Complete the following table for a single firm in the short run. Using the information in the table, fill in the following supply schedule for this individual firm under perfect competition and indicate profit (positive or negative) at each output level. (Hint: At each hypothetical price, what is the MR of producing 1 more unit of output? Combine this with the MC of another unit to figure out the quantity supplied.)Suppose that the market for dress shirts is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this market. (?) 50 45 Profit or Loss 40 35 30 АТС 25 20 15 10 AVC MC 4 8 12 16 20 24 28 32 36 40 QUANTITY OF OUTPUT (Shirts) PRICE AND COST (Dollars per shirt)