1. Suppose a perfectly competitive firm has a cost function described by TC = 200Q+ Q² +225 Each firm's marginal revenue is $240. a. Find the profit maximizing level of output. b. Is this a short-run or long-run situation? How do you know? c. Assuming that this firm's total cost curve is the same as all other producers, find the long-run price for this good.

2. Consider a market with 90 firms, each firm has a short-run total cost function as follows: TC(q) = 5q2, and a marginal cost function: MC(q) = 10q. Market demand is given by equation Qd(p) = 200 - p. a. Solve for the short-run equilibrium outcome: P*, Q* and q*. b. What is one firm's economic profit in this market? c. Consider a different market structure, where there is only one firm, interpreted as a monopolist, and then critically discuss the impact on equilibrium price and quantity. Discuss total surplus for these two types of market structures.

M10

why does price equal marginal revenue for the perfectly competitive firm? what is the relationship to the demand curve for the firm?

2. A firm sells its product in a perfectly competitive market where other firms charge a price of $80 per unit. The firm's total costs are CQ)=40+8Q+ 20%. a. How much output should the firm produce in the short run? b. What price should the firm charge in the short run? c. What are the firm's short-run profits? d. What adjustments should be anticipated in the long run?

a.Suppose a perfectly competitive firm can produce10000 bushels of corn a year at an output at which marginal revenue is equal to marginal cost. The market price of corn per bushel is $2. The firm's total costs per year are $30000 and fixed costs per year are $15000. Show and explain which of the following is true: In the short run, this firm should a) Produce 20000 bushels to try to increase economic profit. b) Produce 10000 bushels of corn because, although they are losing money, they are losing less than if they shut down. c)Shut down. d) Continue producing until the price of corn increases.       b.A perfectly competitive firm, with MC=q operates in a market character,zed by the following market demand and supply conditions: Demand: Q=20000-100P Supply: Q=100P   How much output does this competitive firm produce to maximize profit? Show your work graphically and algebraically.

68. In a perfectly competitive market, industry demand is given by Q = 1000 – 20P. The typical firm’s average cost is TC = 300 + Q2 /3, and marginal cost by MC = (2/3)Q. What is the market price? A.$40 B. $32 C. $28.57 D. $30

1. If the average cost function of a firm producing a good in perfectly 40 competitive industry is AC = 2Q +9+, where Q is output level and the industry price is given to be P = $25. a) Derive the short-run supply curve for this firm b) Calculate the optimal level of production by this firm. c) Find the maximum profit of the firm. d) Should the firm produce in the short run or shut down? Justify.

Question 35 Suppose all firms in a perfectly competitive industry have marginal cost of producing q units is MC = 8 + 16q. The industry demand curve is given by P = 488 – Q. The price of the good is $200. What is this firm’s optimal short-run quantity and how many firms produce this good in the short run?     12 units and 12 firms     48 units and 24 firms     192 units and 24 firms     12 units and 24 firms

5. Suppose the market is perfectly competitive. The market equilibrium market price P = $20. A consumer's willingness to pay (WTP) is 30 - q. how much will this consumer buy and why? A firm's MC= 2q. What is the profit maximizing quantity this firm will produce? can you tell if this firm is making positive, negative, or zero economic profit?