EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Chapter 12, Problem 12.10P
a)
To determine
To Calculate: the typical firm’s supply curve, the market supply curve and the
b)
To determine
To Calculate: the demand curve facing the price leader.
c)
To determine
the profit to be maximized, number of quantities of the product to be produced by the price leader and also prevailing the price and quantity in the market.
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Students have asked these similar questions
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?
Consider the market for ice cream. Suppose that this market is perfectly competitive.
The cost structure of the typical ice cream producer is as follows. Average total cost is equal to
50
1
1
ATC(Q)
+÷Q, average variable cost is equal to AVC(Q) =;Q, and marginal cost is equal to
2
MC(Q) = Q.
Now, suppose that a new scientific study comes out that shows that soil pollution from rock salt (a key
input for making ice cream) is extremely hazardous to human health. In response, the government
decides to impose harsh re-zoning restrictions on any land once used for making ice cream. This reduces
the market rent for land used to make ice cream, which in turn lowers the opportunity cost of operating an
ice cream factory. This reduction in the opportunity cost of capital causes the total fixed cost of ice cream
production to fall to 32, but there is no change to variable cost.
Give formulas for the typical ice cream producer's new average total cost curve ATC(Q) and
marginal cost curve MC(Q).
In competitive markets, there are many small firms with each firm unable to influence the market price. Suppose company ABX operates in the wheat market. The company produces and markets wheats at a Price = $20 per container. The firm’s total costs are given as:
TC = 50 +2Q + 3Q2
What is the firm Fixed Cost? Why? Also, use a graph to support your answer.
What price should the firm charge? Why
Chapter 12 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 12.2 - Prob. 1TTACh. 12.2 - Prob. 2TTACh. 12.2 - Prob. 1MQCh. 12.2 - Prob. 2MQCh. 12.2 - Prob. 1.1TTACh. 12.2 - Prob. 2.1TTACh. 12.2 - Prob. 1.1MQCh. 12.3 - Prob. 1MQCh. 12.3 - Prob. 2MQCh. 12.3 - Prob. 1TTA
Ch. 12.3 - Prob. 2TTACh. 12.3 - Prob. 1.1MQCh. 12.3 - Prob. 2.1MQCh. 12.3 - Prob. 1.1TTACh. 12.3 - Prob. 2.1TTACh. 12.4 - Prob. 1TTACh. 12.4 - Prob. 2TTACh. 12.5 - Prob. 1MQCh. 12.5 - Prob. 2MQCh. 12.5 - Prob. 1TTACh. 12.5 - Prob. 2TTACh. 12.6 - Prob. 1MQCh. 12.6 - Prob. 2MQCh. 12 - Prob. 1RQCh. 12 - Prob. 2RQCh. 12 - Prob. 3RQCh. 12 - Prob. 4RQCh. 12 - Prob. 5RQCh. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 8RQCh. 12 - Prob. 9RQCh. 12 - Prob. 10RQCh. 12 - Prob. 12.1PCh. 12 - Prob. 12.2PCh. 12 - Prob. 12.3PCh. 12 - Prob. 12.4PCh. 12 - Prob. 12.5PCh. 12 - Prob. 12.6PCh. 12 - Prob. 12.7PCh. 12 - Prob. 12.8PCh. 12 - Prob. 12.9PCh. 12 - Prob. 12.10P
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