True or False and explain the math In the market for widgets, there are 200 firms which each have a supply function of q@(p) = 2p - 8 and 100 firms which each have a supply function of qs(p) = p - 3. Therefore, the industry (aggregate) supply curve has a kink at P=$4 and Q=100.

True or False and explain the math In the market for widgets, there are 200 firms which each have a supply function of q@(p) = 2p - 8 and 100 firms which each have a supply function of qs(p) = p - 3. Therefore, the industry (aggregate) supply curve has a kink at P=$4 and Q=100.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: 1. Consider two industries. Industry A has n = 3 identical firms, and each firm has cost function…

A: In a Cournot duopoly, each firm makes production decisions based on the assumption that its…

Q: There is a competitive industry with an infinite number of potential firms. All firms have the same…

A: In the Long Run equilibrium price P*, the profits are zero, that is, P* = MC(q) =ATC(q) MC(q) =…

Q: A market consists of a dominant firm and a number of fringe firms. The followings are the…

A: If the market consists a dominant firm, the firm will behave like monopoly as it has large market…

Q: Consider a market served by identical firms with the cost function C(q) = 722 + (q² / 200). The…

A: In economics, market equilibrium refers to a condition in which economic factors such as supply and…

Q: npetitive market has a cost function of C=5+ q? e market demand function is Q=420-p. termine the…

A: In a perfectly competitive market there are large number of firms producing similar and identical…

Q: production=

A: In the context of economics, "production" refers to the entire quantity of products or offerings…

Q: Consider an imperfectly competitive service provider, Muscat Automotive Repair Services (MARS),…

A: Price discrimination is a microeconomic strategy under which different prices are charged by the…

Q: c) Find the market equilibrium point. Explain what will happen if the company decides to sell a pen…

A: The state of balance in a market where the quantity demanded (D(x)) by buyers matches the quantity…

Q: S;(p) p/2. a. Plot and label the four industry supply curves generated by these firms if there are…

A: Given, Supply curve, S(p) = P/2. a) The supply curve for each firm are:…

Q: Will, Jill, and Phil are all wheat farmers. The wheat industry is perfectly (purely) competitive.…

A: The short-run supply(ss) curve of the industry is a summation of quantity supplied by every producer…

Q: Consider a competitive market in which price adjusts to excess demand or supply and firms enter and…

A: The excess demand in the market requires some adjustment among the price, which is represented…

Q: A market consists of a dominant firm and a number of fringe firms. The followings are the…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: The market for drones is perfectly competitive. Assume for simplicity that fractions of everything,…

A: Marginal cost is the cost incurred when an additional unit of output is produced by the firm. In…

Q: A firm operates two plants. The total cost schedules for the respective plants are TC1 = 5*Q1 +…

A: Profit maximization is that the short- or semipermanent method through that a corporation determines…

Q: In the gas industry, each firm chooses the output level to produce and price is determined by…

A: When the two firms are simultaneously choosing their output levels, we use Cornot duopoly model to…

Q: Profit is the incentive that drives our market economy. Firms make production, pricing, and hiring…

A: The Kaiser Aluminium case presents a unique dilemma at the intersection of market dynamics and…

Q: Suppose the inverse demand function is P = a −bQ, where a is the market price when Q=0 and b is the…

A: Given information Inverse demand function P=a-bQ Cost function C=CiQi Q=q1+q2

Q: a competitive industry have identical cost functions c(y)=y2+ 25 for y> 0 and C(0) = 0. The demand…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub parts for…

Q: 4. Consider a competitive industry with a large number of firms, an of which have identical cost…

A: As given Cost function is c(y) = y2 + 1 and demand function is D(p) = 52 - p

Q: Consider a set of 1000 companies operating in a competitive market. The supply curve for this market…

A: According to the question, There are 1000 companies in a market. The supply curve for this market…

Q: I) Consider the market for a particular type of financial service. Assume 1) all firms are identical…

A: TC= 2q3-30q2+150q 1) In long-run, equilibrium is at the point where;…

Q: Find an individual firm’s supply curve. How many firms are there currently in the market?

Q: A market consists of a dominant firm and a number of fringe firms. The followings are the…

A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…

Q: After the market changes from perfect competition to a monopoly.. OA. social surplus decreases B.…

A: A perfectly competitive market structure has a large no of sellers and buyers, this makes it…

Q: A market consists of a dominant firm and a number of fringe firms. The followings are the…

A: If the market consists a dominant firm, the firm will behave like monopoly as it has large market…

Q: The inverse demand for shampoo is P = 30 – 0.03Q, where P is the price per bottle in dollars and Q…

A: Step 1:Inverse demand refers to the relationship between the price of a good or service and the…

Q: Consider an industry with two possible long-run cost functions. There are no quasi-fixed costs in…

A: Demand:Demand is the desire of an individual ability and willingness to pay for a product. The…

Q: Consider a market with two identical firms, Firm A and Firm B. The market demand is: P = 100 –Q…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Suppose we are studying the long-run competitive market for robots, the market demand for robots…

A: Note-Since you have posted multiple independent questions in the same request, we will solve the…

Q: of: MC = 80 a. Find the Cournot equilibrium quantities for each firm. What is the Cournot…

A: Demand curve shows the relationship between the price and quantity demand.Marginal cost refers to…

Q: Assume that prior to the outbreak of the coronavirus (Covid-19), the natural gas industry was in…

A: The phrase "long-term" refers to the time span during which a company can change all of its inputs.…

Q: Will, Jill, and Phil are all wheat farmers. The wheat industry is perfectly (purely) competitive.…

A: ATC stands for average total cost, which is sometimes known as average cost or unit cost. Average…

Q: 6. Suppose that there are two identical firms in the silver mining industry. The cost curve of each…

A: Firms engages in QC (quantity competition) and PC(price competition) to raise their profits .Firms…

Q: Consider a homogeneous goods industry where two firms operate and the linear demand is given by p(y1…

A: Cost function: c1(y1)=cy1 Demand function: D(p) =a-bp Revenue function: R(p)=D(p)-S(p)

Q: Suppose that there are two types of firms in a perfectly competitive market. Firms of type A have…

A: Supply can relate to the amount available at a specific price or the amount available across a…

Q: The market for good X consists of 1,000 identical firms, each with the total and marginal cost…

A: In short run, Price = MC. Firm's supply function is its MC function. In long run, new firms enter…

Q: A firm operates two plants. The total cost schedules for the respective plants are TC1 = 5*Q1 +…

A: Given TC1 = 5q + 0.1q2 Demand schedule = q = 160 – 10p MC1 = dTC/dq = 5 + 0.2q TR = P * q Price…

Q: There are two firms in the pumpkin industry: C and S. The demand function for pumpkins is q = 3, 200…

A: Duopoly is the form of oligopoly market structure where there are two firms producing goods and…

Q: Consider a homogeneous goods industry where two firms operate and the linear demand is given by p(y1…

A: Market demand curve: p(y1 + y2 ) = a - b(y1 + y2 )…

Q: Because you know that competitive firms earnzero economic profit in the long run, you know the…

A: Average total cost refers to the approximate total cost of production at different levels of…

Q: Consider an industry with two firms producing similar products. Each firm's total cost (in dollars)…

A: Average total cost (ATC) is a measure used in economics and business to determine the average cost…

Q: a quasi-fixed cost of $5000 (that is COST = 0 if they exit but COSTS = 5000 + variable costs if they…

A: Given, Supply curve, qs = 12p Quasi fixed cost = $5000 Demand curve,…

Q: A firm supplies its product to a number of UK cities. Its overall cost function can be expressed as…

A: Total cost function of the firm is given as : TC = 40 q2 + 900 q…

Q: disregard the portion of the supply curve that corresponds to prices where there is no output since…

A: Demand, or the desire for a commodity, is defined as a person's willingness to buy a specific…

Q: Determine the profit-maximizing prices when a firm faces two markets where the inverse demand curves…

A: The equation of demand curve in market A: The equation of demand curve in market B: The marginal…

Q: You are the manager of a firm that produces output in two plants. The demand for your firm's product…

A: Demand function : 26 - 2Q Q = Q1 + Q2 C1 = 5 + 1.5 Q12 C2 = 10 + Q22

Q: market consists of a dominant firm and a number of fringe firms. The followings are the information…

Question

True or False and explain the math
In the market for widgets, there are 200 firms
which each have a supply function of q@(p) = 2p -
8 and 100 firms which each have a supply
function of qs(p) = p 3. Therefore, the industry
(aggregate) supply curve has a kink at P=$4 and
Q=100.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Analyzing the aggregate supply function

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 8 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

There are 100 consumers on the market for product X. The individual demand function is the same and has the form: p = 2200 -5q. And assume that only one enterprise produce product X has a production cost function of TC = 1/10Q2 + 400Q + 3,000,000. Determine: 1. The market demand function 2. Marginal Cost fuction 3. Marginal Revenue fuction 4. Price and Quantity to maximize profit 5. The price If the company wants to maximize the output without losses
Assume that you are an economic consultant. The firm that hired you has provided the information below. The firm is a price searcher and wants to maximize its profit (or minimize its loss). InformationPrice: $4Elasticity of demand at price of $4 is Ed=-1Quantity of output: 2000Total variable cost: 4000Average fixed cost: 1Marginal cost is constant and equal to the average variable cost: MC=ACV=2. Which of the following answers correctly describes this case? a) The firm is maximizing profits at the current price of $4.b) The firm should increase price and reduce quantity produced.c) None of the other answersd) Firm should reduce price and increase quantity produced.
Suppose a perfectly competitive market has firms with total cost given by c(y) = 3y2+ 10. a) What is the individual firm’s profit-maximizing output? b) If there are m firms, what is the industry supply function? c) Let the industry demand be X(p) =a−bp, where a and b are positive constants. Find theequilibrium price in the market. What is the equilibrium quantity sold?
Consider a perfectly competitive market where the demand for the good is given by Q-769-5p, where Q denotes the quantity demanded at price p. On the supply side, the good can be produced by identical firms with U-shaped average cost curves. The total cost of the industry as a function of total output, Q, is given by C(Q) = 5 Q What is the (long run) equilibrium price in this market? (As usual, you must enter a number below, not a ratio, not an expression with symbols..., just a number. Don't round, even if rounding makes sense...)
consider a market with a large number of firms, an upward sloping supply curve S0, and a downward sloping demand curve D0. We will start with the assumption that the market is perfectly competitive; hence, the supply curve S0 is the sum of the marginal cost curves of all the firms. Assume the market is perfectly competitive. Indicate the original competitive equilibrium price P0, equilibrium quantity Q0, the resulting Consumer Surplus CS0, the resulting Producer Surplus PS0, and the “socially optimal” output (the output the Benevolent Dictator would choose) QSO on your graph. Graphically indicate the size of Dead-Weight Loss DWL0 if there is such a loss. Question - Now suppose that scientists discover that this particular product has a significant Positive Externality. The Demand curve is a depiction of marginal private benefit (MPB). However, the existence of the positive externality means that for every given output level, Marginal Social Benefit (MSB) is higher than Marginal…
Determine the profit-maximizing LOADING... prices when a firm faces two markets where the inverse demand curves are Market A: pA=100−2QA, where demand is less elastic, and Market B: pB=60−1QB, where demand is more elastic, and Marginal Cost=m=20 for both markets. Part 2 For Market A: pA=$enter your response here. (Round your response to two decimal places.) Part 3 For Market B: pB=$enter your response here. (Round your response to two decimal places.)
Please diagram the revenue and profit situation (which would also include the cost curves) for a producer of a highly elastic (but not perfectly elastic) good of your choice (a restaurant, boutique clothing store, etc.). Under what circumstances would it make sense for them to raise their price? While profit maximization is the main goal for most firms (and one which you should be able to represent on a diagram), you may wish to consider alternative goals depending upon the business you have chosen. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Suppose you are given the following information about a particular industry: QD11200-100P QS = 1500P q² 200 C(q)=761 + 2q 200 Market demand Market supply Firm total cost function Firm marginal cost function. MC(q)= Assume that all firms are identical and that the market is characterized by perfect competition. Find the equilibrium price, the equilibrium quantity, the output supplied by the firm, and the profit of each firm. The equilibrium price is $. (Enter your response rounded to two decimal places.)
Suppose the government regulates the price of a good to be no lower than some minimum level. Moreover, suppose firms misinterpret the regulated price as a signal to produce more output. Using the graph to the right, compute this fictional industry's net gain or loss resulting from this policy. Price ($) As a whole, firms in this industry will experience a net of $ because of this policy. (Enter your response rour nearest whole number.) loss 4.50 3.50 gain Q ☑ S Ps = $5.50 D :100 140 180 Quantity
A market has many small firms and one dominant firm. The market demand is Q = 100-5P. The dominant firm has a constant marginal cost of $6. All the smaller fringe firms combined have a supply curve given by Qs = 4P-8. The dominant firm sets the market price, and the fringe firms act as price takers. The dominant firm allows the fringe firms to sell as (Enter your responses many units as they want at the price set by the dominant firm. The rest of the market is then supplied by the dominant firm. The profit-maximizing quantity produced by the dominant firm is units and the price it charges is $ as integers.) The fringe firms will produce and sell a total of units at the market price r your response as an integer.)
Suppose that there are 177 identical firms in the market, each with a cost function C(q) = 100 + 1.5q², and that market demand is D(q) = 450 - 15p. What is the equilibrium price? Your Answer:
Feedback Imagine that the flat-screen TV market is made up of one large firm that leads the industry and sets its own price first, and another firm that follows the leader when deciding its own profit-maximizing strategy. The leader has a cost function of c₁ (91) = 5q1, and the follower has a cost function of CF (ar) = 4, where Q =q₁ + qr. Total market demand for flat-screen TVs is given by the function Q = 250.00-2p. Calculate the following values: Leading firm's production: q = Follower firm's production: qp = Equilibrium price: p= $49.37 9 OF 16 QUESTIONS COMPLETED 118.33 32.92 (Round to two decimals if necessary.) (Round to two decimals if necessary.) (Round to two decimals if necessary.) See Hint 4 VIEW SOLUTION SUBMIT ANSWER