choose the right answer: a) P=8, q=9b) P=16, q=8c) P=40, q=5d) P=24, q=7 Suppose that wood industry is a perfectly competitive industry that involves160 identical firms. The production function of each of these identical firms isas follows:q = KZLZwhere K denotes capital and L denotes labor with the correspondingprices: Pg = 10 and P 12. Suppose that capital is fixed K=12 and marketdemand function is given as follows:Q0 = 1,600 – 20PWhat is the equilibrium price and quantity, respectively?

Correct option : b) P= 16, q= 8 In perfect competition, short run firm's supply is given by marginal…

Answered: Suppose that wood industry is a…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.9P

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A firm in a perfectly competitive industry has patented a newprocess for making widgets. The new process lowers the firm’saverage cost, meaning that this firm alone (although still aprice taker) can earn real economic profits in the long run. a. If the market price is $20 per widget and the firm’s marginalcost is given by MC=0.4q , where q is the dailywidget production for the firm, how many widgets willthe firm produce? b. Suppose a government study has found that the firm’snew process is polluting the air and estimates the socialmarginal cost of widget production by this firm to be. If the market price is still $20, what is thesocially optimal level of production for the firm? Whatshould be the rate of a government-imposed excise tax tobring about this optimal level of production? c. Graph your results.
Suppose that wood industry is a perfectly competitive industry that involves 160 identical firms. The production function of each of these identical firms is as follows: 1 1 q = KZLZ where K denotes capital and L denotes labor with the corresponding prices: Px demand function is given as follows: - 10 and P 12. Suppose that capital is fixed K=12 and market QP = 1,600 – 20P What is the equilibrium price and quantity, respectively? P=16, q=8 P=24,q=7 OP=8, q=9 P=40, q=5
The marginal and average total cost curves for barbers in an area are cosntant at $12.00/haircut. The daily demand curve for haircuts in the area is given by: P = 22 - 0.001Qd where P is the price in dollars per haircut and Qd is the daily quantity demanded in number of haircuts. Haircuts are provided in a perfectly competitive market and each barber can provide exactly 25 haircuts daily. Suppose that the government decides to limit the number of barbers to 320. Each year, barbers must obtain a government-issued license to cut hair. Based upon the previous information: a. What will be the long-run equilibrium price for a haircut given there are only 320 licensed barbers?b. How much economic profit will each licensed barber earn daily?
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 you
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?
A firm has a linear demand function for its product. When the price of the product isSh.220, the quantity demanded is 40 units. When the price increases to Sh.240, thequantity demanded becomes 30 units. In addition, the firm’s marginal cost function isgiven by:MC = 40q – 2q2 + 2Fixed cost = Sh.5 millionWhere q = quantity demanded, MC = marginal cost (Sh. million)Evaluate the level of output that maximizes profits.
1. Pekan Nenas has 20 competitive pineapple orchards, all of which sell pineapples at the world price of RM2 per pineapple. The following equations describe the production function and the marginal product of labor in each orchard: where Q is the number of pineapples produced in a day, L is the number of workers, and MPL is the marginal product of labor. (a) (b) (c) Q = 100L - L² MPL = 100 - 2L, (d) What is each orchard's labor demand as a function of the daily wage W? What is the market's labor demand? Pekan Nenas has 200 workers who supply their labor inelastically. Solve for the wage W. How many workers does each orchard hire? How much profit does each orchard owner make? Calculate what happens to the income of workers and orchard owners if the world price doubles to RM4 per pineapple. Now suppose that the price is back at RM2 per pineapple but a flood destroys half the orchards. Calculate how the flood affects the income of each worker and of each remaining orchard owner. What…
ASAP Does the state of mr=mc in a perfect competitive market mean that the firm is supposed to sell out no matter how much marginal cost they put? Because mr=mc occurs only if the product sells out 100% corresponing to the put marginal cost, right? I also know that the state is occured because the price in a competitive market is fixed, but i wondered if the state means also selling out completely.
If a perfectly competitive firm which produces two commodities, has the cost function C = 2Q + 2Q3 where Q1 and Q2 denote the production level of commodity 1 and commodity 2 respectively. (Note: There are 3 questions in the test regarding the information given above) If the prices of commodities are P and P2 respectively, find the optimal levels of output that the firm should produce to maximize its profit Lütfen birini seçin: O a. Qi = 1/6P, and Q; = 1/6P, %3D O b. Q; = 1/4P and Q; = 1/6P2 O c. Q; = 1/6P and Q; = 1/4P2 | O d. Q; = 1/4Pi and Q; = 1/4P2
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