Let us consider an economic sector characterized by the following data. The (inverse) demand function is p = 20 -2g with q the quantities produced by the firms in the secto and p the price. The total cost of production for any firm in the sector is: CT(q) = q² - 4g + 5 a) First, assume that there is only one firm, firm 1, in the industry. Calculate the price, quantity produced and profit of firm 1 in a monopoly situation that wan to maximize its profit
Q: Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run…
A: The perfect competition would result in the large number of buyers and sellers in the market. The…
Q: onsider a competitive firm that has the cost function, TC(Q) and faces the demand P = P(Q), that is,…
A: Since, you have asked a question with multiple parts, we will be answering the first three parts for…
Q: The marketing department of a business has determined that the demand for a product can be modeled…
A: Demand, p=2000−10xx = 2000 - P10x = 200 - 0.1P TR = PQ .....Q=xTR = (2000 -…
Q: The competitive fringe supply function (total): QF=2P-12 The dominant firms marginal cost function:…
A: (Q) A market consists of a dominant firm and a number of fringe firms. The followings are the…
Q: Assume that the cannabis firm called Aphria Inc. purchases resources a and b under perfectly…
A: The profit is maximum at:MP* price equal to input prices
Q: Suppose a firm faces the demand function q = 600 – 6P. The firm's total production costs are given…
A: Profit maximizing condition for a perfectly price discriminating monopolist is given by - MC(q) =…
Q: Assume the demand function for a product is given by QD = 20,000 – 10P + 0.4I, where P = price of…
A: Given: QD = 20,000 – 10P + 0.4I QS = 30P I= $10,000 Therefore, QD=20,000–10P+0.4IAs…
Q: Suppose that each firm in a competitive industry has the following as the Total cost: TC=50+ ½q2…
A: The efficiency of scale is the point where the average cost is the minimum and it is equal to…
Q: Consider a market for a portable hard drive. Suppose that there are 50 firms producing the identical…
A: Given, Qd = 1800 - 10P C(q) = 8+Q2i/2
Q: The following are the total cost (TC), marginal cost (MC) and total revenue (TR) functions for a…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: In Nyeri town there are only two milk processors. The local inverse demand for milk is given by: Q =…
A:
Q: You are an executive for Super Computer, Inc. (SC), which rents out super computers. SC receives a…
A: Demand for the two types of customer (both having 10 customers per types) Academic institution Q=…
Q: Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run…
A: A competitive market is characterized by a large number of buyers and sellers. The equilibrium price…
Q: Suppose that BMW can produce any quantity of cars at a constant marginal cost equal to $50 and a…
A: Marginal cost = 50 fixed cost = 22500 Demand in Europe QE = 8,000 – 80PE Demand in US QU = 4,000 –…
Q: Suppose Firm X is a dominant firm in a market where the market demand is Q = 1200 -2p. Once Firm X…
A: A residual demand function means the demand faced by an individual firm (Firm X in given case) that…
Q: uppose that each firm in a competitive industry has the following identical costs: Total cost: TC =…
A: Total Cost = Total fixed cost + Total Variable cost Marginal cost is the supply curve of a firm in…
Q: A competitive firm’s production function is given by y= f(x1,x2)= 4x11/2 + 10x21/2 a) The price of…
A: Answer: Given, Production function: y=fx1,x2=4x112+10x212 Price of factor 1(w1)= 1 Price of factor 2…
Q: Two dairy farmers produce milk for a local town with local milk demand given by Q=100-0.3333333333P…
A: Given Q=100-1/3p TC=150+2Q
Q: Suppose a firm faces a demand curve for its product P = a - bQ, and the firm's costs of production…
A: Given demand function is P = a -bQ Cost function C(Q) = cQ + d We have to find out the expression…
Q: firm’s production function is Q = 10 + 30L - .5L2+ 30K – K2, and its competitive demand function is…
A: Answer A firm’s production function is Q = 10 + 30L - 0.5L2 + 30K – K2 MPL = = 40 - L At…
Q: Suppose that a firm produces identical commodities and sell them in two separate markets charging…
A: Given Demand functions: P1=100-Q1 .... (1) P2=80-Q2 .... (2) Cost function: C(Q)=6Q…
Q: Suppose that Vesoro is one of more than a hundred competitive firms in Houston that produce such…
A: Demand refers to the consumer wish to purchase at a given price in a given period of time. supply…
Q: Suppose the demand function for widgets is Q(p) = 60 – p, and all firms that produce widgets have…
A: We are given the demand function for widgets as Q(p) = 60 – pAnd, the cost function is given as C(q)…
Q: pose a farmer is a price taker for soybean sales with cost functions given by the following:…
A: The farmer operates in a perfectly competitive market since he is a price taker implying that the…
Q: uppose that each firm in a competitive industry has the following identical costs: Total cost: TC =…
A: 1) Let's start by calculating the fixed, variable and marginal costs. The total cost function of…
Q: Consider the competitive market for steel. Assume that, regardless of how many firms are in the…
A: Below is the table:
Q: You are an executive for Super Computer, Inc. (SC), which rents out super computers. SC receives a…
A: With a two-part tariff and no price discrimination, rental fees will be equal to consumer surplus…
Q: PakMonoG’s inverse demand function is P = 100 – 2Q and cost function is TC = 10 + 2Q, where Q is…
A: Given; Demand function; P=100-2Q Cost function; TC=10+2Q where; Q= quantity in units P= price in PKR
Q: Imagine that the cell-phone market is made up of one large firm that leads the industry and sets its…
A: Individual supply function is qi=67.5+(P/5). Total small firm is 20.Market demand is Q=6700-P.…
Q: Suppose that each firm in a competitive industry has the following as the Total cost: TC=50+ ½q2…
A: TC = 50 + 0.5q2 MC = q D: Q = 120 – P In competitive industry, firms will supply up to P = MC…
Q: Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run…
A: Answer: Note: since I do not have the same graphing tool the graph is presented differently. (1).…
Q: A firm’s production function is Q = 10 + 30L - .5L2 + 30K – K2, and its competitive demand function…
A: Answer A firm’s production function is Q = 10 + 30L - 0.5L2 + 30K – K2 MPL = = 40 - L At…
Q: Suppose the daily demand function for pizza in St. Catharines is Qd = 1525 – 5P. For one pizza…
A: Given, Qd = 1525 − 5P C(q) = 3q+0.01q2 MC = 3 + 0.02q
Q: Assuming the market equilibrium price for tomatoes is $1.75 per kilo in perfect competition market.…
A: Marginal revenue: Marginal revenue is defined as the additional revenue earned by a firm due to the…
Q: Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run…
A:
Q: Firm 1 and firm 2 compete with each other by choosing quantities. The market demand is given by if…
A: Here demand function=P=400-Q=400-q1-q2 cost function of firm1=TC1=40q1 cost function of…
Q: A perfectly competitive industry that produces wireless headphones consists of many firms that can…
A: Given information 1 firm can produce=1000 pairs of headphones Minimum average cost=$100 marketing…
Q: What is the quantity that Firm 1 produces? Round your answer to 2 decimal points.
A: Given, p=20-3q Where q=q1+q2+q3 Cost function= ci(qi)= 5qi2 p= 20-3(q1+q2+q3) p= 20-3q1-3q2-3q3 Now…
Q: 5. The market demand for leather handbags is given by the function P = 75 - 1.5Q. P is price per…
A: A typical firm Produces where p= MC Where price is determined by market. And total no of firms = Q/q…
Q: Suppose that the market demand for a certain product is given by P = 670 – Q. where Qis total…
A: Introduction Here market demand has given. P = 670 - Q Here are three firms, so market demand can be…
Q: • Consider a market with two identical firms: Firm A and Firm B. The market demand is P = 310 - 2Q,…
A: We form the profit functions for each firm, differentiate it with respect to the quantity of the…
Q: 1) There are 1000 pear producers that have identical cost functions, where q is the number of…
A: Note: in the first question the cost function is missing thus I am solving the second question only.…
Q: Wakanda is a firm that solely supplies vibranium to Marley and Paradis. The demand function of the…
A: The profit is maximized where the MR=MC.
Q: Consider a market with four identical firms, each of which makes an identical product. The demand…
A:
Q: Monopoly outcome versus perfectly competitive outcome Consider the daily market for hot dogs in a…
A: A perfect market, sometimes known as an atomistic market, is characterized by numerous idealizing…
Step by step
Solved in 2 steps
- Let us consider an economic sector characterized by the following data. The (inverse) demand function is p = 20 -2q with q the quantities produced by the firms in the sector and p the price. The total cost of production for any firm in the sector is: CT(q) = q* - 4q +5 (I have included the questions and answers a) and b) if necessary) a) First, assume that there is only one firm, firm 1, in the industry. Calculate the price, quantity produced and profit of firm 1 in a monopoly situation that wants to maximize its profit Answer: Total Revenue = p*q = (20 - 29) q Marginal Revenue = d(TR)/dq = 20 - 4g Marginal Cost = d(Cq)/dq = 2q - 4 Putting in optimal condition: MR = MC 20 - 4g = 29 - 4 Putting in demand function: p* = 12 (Profit maximizing Output) q* = 4 (Profit maximizing Output) b) Firm 1 seeks to deter the entry of another firm, firm 2, into its market through a sustainable monopoly strategy. Calculate the equilibrium price, quantity and profit of firm 1 given this strategy Answer:…Two farmers produce milk for local town with local milk demand given by Q=100-1/3P (P denotes price measured in Rands, Q denotes the quantity measured in litres). Both farmers have the same cost function given by TC=150+2q (where q denotes output)a. What output should farmer 1 produce if he or she expects their rival to produce 20 units?2. A local business has asked an economic development consultant to help it decide if it can continue to compete with the other businesses in a city's downtown area in a very competitive market. Using historical data on costs, the consultant finds that the total cost function for this business is TC = 10 + Q + .1Q² where Q is amount of output this business produces. Given this TC function, we know that the marginal cost (MC) of production is P = 1+.2Q. a. What are the fixed costs for this business? What is the business's variable cost function? What is the average total cost function? b. Calculate the level of output and the price of a unit of output in long run equilibrium. Sketch a graph of your solution (you do not need to precisely graph the ATC function, you just need to include a plausible version of it). c. Currently, the price of the product is $2.50 because of a recession that has hit the area. The consultant thinks the shop should immediately cease operations. Would you agree…
- Giocattolo is a profit-maximizing firm producing toy cars, which it can produce and sell in its home country, Italy, and abroad in Spain. The average cost (AC) curve on the following graph represents Giocattolo's cost of producing toy cars within one factory, whether in Italy or in Spain. COST (Dollars per toy car) 10 1 0 10 I 1 20 30 40 50 60 70 80 QUANTITY (Thousands of toy cars) AC 90 100 Suppose that at the current market price of toy cars, the demand for Giocattolo's product is 10,000 toy cars per year in Italy and 20,000 toy cars per year in Spain. (Hint: Select each point on the previous graph to see its coordinates.) (?) Based on Giocattolo's average cost curve, within one factory it can produce 20,000 toy cars at S per toy car, and produce the total of 30,000 toy cars at S per toy car. Complete the following table by indicating Giocattolo's total production cost for each scenario. Total Production Cost (Dollars) Scenario Produce 10,000 toy cars in Italy and 20,000 toy cars in…An industry has the following cost function: C(X, Y ) = 1500+20X +20Y . Market demands for the 2 goods are given by PX =80−X, and PY =140−2Y Suppose the government wished to use two part tariffs in these markets, and suppose further that two part tariffs are feasible. Imagine that there are 10 consumer in each market. Solve for a set of two part tariffs (one for each martket) that pay the firm zero profits in total, yet achieves efficiency.Suppose the graph depicts the marginal cost (MC) curves of two profit maximizing Texas cotton farmers, Jesse and Neal. Assume Jesse and Neal sell their cotton in the same competitive market. If the market price is $4 per bale, how many bales of cotton should each farmer produce? Jesse's optimal output: 800 Neal's optimal output: 400 bales MC Neal = MC Jesse MC Neal MC Jesse Price and cost $10- 9 8 7 160 5 4 3 2 0 MC, Neal MC, Jesse 100 200 300 400 500 600 700 800 900 1000 Bales of cotton
- Consider the competitive market for steel. 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 ATC 30 20 MCO AVC 10 + 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of tons) The following diagram shows the market demand for steel. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (Hint: You can disregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 40 firms. 100 90 Supply (20 firms) 80 70 E 60 Supply (30…Suppose that the market for microwave ovens is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. 100 90 80 ATC 70 60 50 40 30 AVC 20 10 MC 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of ovens) For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down, it will produce. (Hint: You can select the purple points [diamond symbols] on the graph to see precise information on average variable cost.) Price Quantity Total Revenue Fixed Cost Variable Cost Profit (Dollars per oven) (Ovens) (Dollars) (Dollars) (Dollars) (Dollars) 25.00 1,600,000 70.00 1,600,000 $25.00 100.00 1,600,000 $35.00 If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's…Consider the competitive market for dress shirts. 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. For each price in the following table, use the graph to determine the number of shirts this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero shirts and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price.
- Suppose that each firm in a competitive industry has the following as the Total cost: TC=50+ ½q2 Where q is an individual firm’s quantity produced. The market demand curve for this product is Demand: Q = 120 – P Where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market What is each firm’s fixed cost? What is its variable cost? At what quantity efficiency of scale would be achieved? Give the equation for each firm’s supply curve Give the equation for the market supply curve for the short run What is the equilibrium price and quantity for this market in the short run? In this equilibrium, how much does each firm produce? Is there incentive for firms to enter or exit? In the long run with free entry and exit, what is the equilibrium price and quantity in this market? In the long-run equilibrium, how many firms are in the market? I want the subparts 4,5,6 to be solved. Thank youSuppose that each firm in a competitive industry has the following as the Total cost: TC=50+ ½q2 Where q is an individual firm’s quantity produced. The market demand curve for this product is Demand: Q = 120 – P Where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market What is each firm’s fixed cost? What is its variable cost? At what quantity efficiency of scale would be achieved? Give the equation for each firm’s supply curve Give the equation for the market supply curve for the short run What is the equilibrium price and quantity for this market in the short run? In this equilibrium, how much does each firm produce? Is there incentive for firms to enter or exit? In the long run with free entry and exit, what is the equilibrium price and quantity in this market? In the long-run equilibrium, how many firms are in the market?In a fishery the long-run harvest function (harvest volume) is H(E) = aE – bE², 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. Suppose that, because of an increase in world demand, the price of the fish from this fishery rises significantly. • Illustrate and explain the impact of this price-increase on the fish stock and the competitive level of effort (or employment) in the fishery. What can be said about the long-run impact on the fish catch? Is it positive, negative, or indeterminate? Explain.