A perfectly competitive firm has the following total cost function: Total output Total Cost 0 20 1 30 2 42 3 55 4 69 5 84 6 100 7 117 How much will the firm produce if the price of the production the market is Rs. 14 per unit? How will it change its output if price rises to Rs. 16 per unit?
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A
Total output |
Total Cost |
0 |
20 |
1 |
30 |
2 |
42 |
3 |
55 |
4 |
69 |
5 |
84 |
6 |
100 |
7 |
117 |
How much will the firm produce if the price of the production the market is Rs. 14 per unit? How will it change its output if price rises to Rs. 16 per unit?
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- A perfectly competitive firm has the following total cost function: Total Output(Units) Total Cost(₨)0 201 302 423 554 695 846 1007 117 How much will the firm produce if the price of the product in the market is ₨ 14 per unit? How will itchange its output if price rises to ₨ 16 per unit?The table above shows the total cost function for a typical firm producing hats in a perfectly competitive market. The market price for hats is $9 per hat. (a) Calculate the average variable cost of the fifth unit. Show your work. (b) What is the firm’s profit-maximizing quantity of hats? Explain using marginal analysis. (c) If the rent of the building the firm occupies increases, what will happen to the firm’s profit-maximizing quantity of hats in the short run? Explain. (d) Draw a correctly labeled graph showing the firm’s demand and marginal cost curves, and show the profit-maximizing quantity of hats, labeled Q*.A firm currently produces 500 units at a price of $40. If it earns $1,500 profit, what must the average cost be? Note: The formula for Profit = Quantity X (Price - Average Cost) Provide your answer below:
- On the graph input tool, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 6, 12, 15, 18, 24, and 30 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green points (triangle symbol) to plot the results. Calculate the total revenue if the firm produces 6 versus 5 units. Then, calculate the marginal revenue of the sixth unit produced. The marginal revenue of the sixth unit produced is________. Calculate the total revenue if the firm produces 12 versus 11 units. Then, calculate the marginal revenue of the 12th unit produced. The marginal revenue of the 12th unit produced is_________.The figure shows a bakery's marginal and average cost curves, and its isoprofit curves. The bakery is a price-taker in a large bread market. Suppose the current market price is P₁. Based on this information, which of the following statements is correct? Price, Cost €6 (5 20 40 60 80 Quantity MC hoprofits AC 100 120 140 160 180 number of loaves Select one or more: a. The bakery would be better off raising its price up to its AC level. O b. The bakery would be minimising its loss at A. Oc. If the bakery is not yet in the market then it would not enter the market. d. If the bakery is already in the market, then it would always immediately exit the market because it is making a loss.The total cost function of a perfectly competitive firm is TC=100+10*Q+5*0^2 For what time period does the function apply? What is the equation of the marginal cost function? If the market price is 50, what is the optimal production quantity of the firm? What is the value of total revenue at the profit maximum? What is the value of total cost at the profit maximum? Will be negative or positive value of the profit at the profit maximum? In the short run, does the company decide to produce (at profit max level)? Which minimum value indicates the shutdown point? Use the following set of options to answer the above questions: long run 100 short run AVCmin ACmin maybe 4 220 positive yes MCmin no 100 years 10+5*Q 200 10+10*Q Qmin
- 10 ATC ATC2 ATC3 ATC, 2 2 4 6 8 10 Quantity (thousands of copies per day) A copy shop is choosing between four different operational sizes (ie, plant size). The average total cost curve for each option is shown in the graph. If the market demand for copies is 12,000 copies per day, how many copy shops would you expect to see in this market? The answer depends on the price of a copy, which is unknown. O 1 (because the copy shop will become a monopoly with a large quantity demanded) O (because the copy shop can't produce 12,000 copies efficiently and will shutdown) 3 (with each shop supplying 4000 copies per day) 8, 6 Average cost (cents per copy)The table shows cost data for a firm that is selling in a perfectly competitive market. This firm's minimum average variable cost is $14 and has fixed costs equal to $100. Output 5 7 9 11 $30 Refer to the above cost table. If the price of the product is $26, the firm will produce loss. 7 units 9 units Select TWO answers from the choices below, one selection is the number of units produced and the second selection is the dollar amount of the loss earned by the firm. $28 $100 $0 $182 11 units ATC $34.00 30.00 30.55 33.09 O units MC $13 5 units 26 35 48 for aThe handmade snuffbox industry is composed of 100 identical firms each having short-run total costs given by , where q is the output per day.20.5105STCqq=++(a) What is the short-run supply curve for each firm? What is the short-run supply curve for the market?(b) Suppose the demand is given by . What will be the equilibrium (both quantity and 110050QP=-price) in this marketplace? (c) What will each firm’s short-run profits be?
- The blue curve on the following graph represents the demand curve facing a firm that can set its own prices. Use the graph input tool to help you answer the following questions. You will not be scored on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per unit) 100 TOTAL REVENUE (Dollars) 90 80 20 10 0 1250 1125 1000 875 750 625 500 On the previous graph, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 10, 20, 25, 30, 40, or 50 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green points (triangle symbol) to plot the results. 375 250 125 + 0 0 0 Demand 5 10 15 20 25 30 35 40 45 50 QUANTITY (Units) + 5 20 10 15 25 30 35 QUANTITY (Number of units) 40 Graph Input Tool Market for Goods 45 50 Quantity Demanded (Units)…Price and cost (dollars) 70 60 50 40 30 20 10 0 MC₁ 50 Quantity MC₂ 100 Demand 150 The demand for dishwashers facing the AllClean Co. is given in the figure above. The firm manufactures dishwashers in two plants. MC₁ and MC2 are the marginal cost curves for those two plants. How should the firm allocate total output between the two plants in order to maximize profit?The table below shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. Assume that output can only be increased in batches of 100 units. Quantity 0 It must fall. 100 200 300 400 500 600 It must rise to offset the increased cost. Total Cost Variable Cost (dollars) (dollars) $1,000 $0 1,360 360 1,560 560 1,960 2,760 4,000 5,800 Suppose the fixed cost of production rises by $500 and the price per unit is still $8. What happens to the firm's profit-maximizing output level? The firm will shut down. O It will remain the same. 960 1,760 3,000 4,800