Given the following total cost function facing a perfectly competitive firm: TC = 500 + 10q2...
Given the following total cost function facing a perfectly competitive firm: TC = 500 + 10q2
(a) If price = 100, determine the level of output and profit earned by the firm in the short-run.
(b) Based on your answer for part (a), should the firm continue to produce in the short- run? Why or why not?
(c) Graphically illustrate a perfectly competitive firm earning a positive profit, zero profit, and incurring a loss in the short-run.
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Given the following total cost function facing a perfectly
competitive firm: TC = 500 + 10q2...
A perfectly competitive, profit maximizing firm earns zero economic profit in the long run. The firm’s total...
A perfectly competitive, profit maximizing firm earns zero economic profit in the long run. The firm’s total cost is: TC = a + bQ2. Use only the cost curve given. Determine mathematically the level of output the firm will produce in the long run. Show mathematically if this amount differs from the amount of output the firm would produce in the short run. Explain why a perfectly competitive firm earns zero economic profit in the long run.
1. Suppose that a firm operating in perfectly competitive industry has short-run cost function given by...
1. Suppose that a firm operating in perfectly competitive industry has short-run cost function given by C(q) = 5+2q+9. The market price is $10. (a) What is the profit-maximizing output level for this firm? (b) What is the firm's total revenue and profits at the profit-maximizing output? (c) What is the minimum price at which the firm will produce a positive level of output in the short run?
1. Suppose a perfectly competitive firm has a cost function described by TC = 200Q +...
1. Suppose a perfectly competitive firm has a cost function described by TC = 200Q + Q 2 + 225 Each firm’s marginal revenue is $240. a. Find the profit maximizing level of output. b. Is this a short-run or long-run situation? How do you know? c. Assuming that this firm’s total cost curve is the same as all other producers, find the long-run price for this good.
1) A perfectly competitive firm faces the following Total revenue, Total cost and Marginal cost functions:...
1) A perfectly competitive firm faces the following Total revenue, Total cost and Marginal cost functions: TR = 10Q TC = 2 + 2Q + Q2 MC = 2 + 2Q At the level of output maximizing profit , the above firm's level of economic profit is A) $0 B) $4 C) $6 D) $8 *Additional information after I did the math: The price this firm charges for its product is $10, the level of output maximizing profit is 4...
Numerical Example A representative firm is operating in a perfectly competitive industry. The firm’s total cost,...
Numerical Example A representative firm is operating in a perfectly competitive industry. The firm’s total cost, TC, is given by the equation TC = 50 + 5q2 , where q is output. Based on this equation, the marginal cost, MC, is 10q. 1. If the output price is $100, what is the short-run profit-maximizing output? 2. How much profit does this firm make at that level of output? 3. What do you expect to happen in the market in the...
3. Illustrate graphically Suppose that a competitive firms marginal cost of producing output 2 is given...
3. Illustrate graphically Suppose that a competitive firms marginal cost of producing output 2 is given by MC(q)= 70+6q Assume that the market price of the firm's product is $145. A. At what level of output will the firm produce? B. How much is the firm's producer surplus? C. Illustrate graphically profit maximization point and producer surplus. D. Illustrate this market at a loss. Explain. 4. Graphically illustrate a perfectly competitive firm and a non-perfectly competitive firm side by side....
A perfectly competitive firm faces total cost of product as follows: TC = 0.1q2 + 10...
A perfectly competitive firm faces total cost of product as follows: TC = 0.1q2 + 10 + 50. a. If market price is $20/unit, find the output rate at which firm's profit is maximized. b. Find the firm's shut-down point. c. Find the firm's short-run supply function (express output q as a function of market price P). d. If there are 100 identical firms (have the same cost of production) in the market, determine market supply function.
Name 1. Describe a perfectly competitive market structure in terms of number of firms, ease of...
Name 1. Describe a perfectly competitive market structure in terms of number of firms, ease of entry a and product differentiation. 2. Draw the short-ran cost and revenue curves for a firm making an economic profit in a perfectly petitive industry. Show the firm's short-run supply curve. 3. Why might a firm continue to produce at a loss in the short na instead of shutting down? a perfectly competitive firm will make an economie profit in the short b. fP-...
The market price is p=50 3. Consider a competitive firm with total costs given by TC(q)...
The market price is p=50
3. Consider a competitive firm with total costs given by TC(q) = 100 + 10q+q? (e) Graph the ATC, AVC, MC, and MR curves in a single graph, and indicate the profit maximizing level of output. If there are profits, shade the region corre- sponding to profit and label it. (f) If fixed costs increase from 100 to 500, what happens to the profit maximizing level of output, TR, TC, and a? (g) If fixed...
1. If each competitive firm in an industry has the short run cost function TC=50+5q+q2, and...
1. If each competitive firm in an industry has the short run cost function TC=50+5q+q2, and MC=5+2q. The market price is $35. a. What is the profit maximizing output level for each firm? b. What are the profits? c. Now, suppose that fixed costs were $250 instead of $50, so the firm faces the short run cost function TC=250+5q+q2. How does this change affect the firm’s output decision and profits? Should the firm continue to operate in the short run?
1. Suppose that a firm operating in perfectly competitive industry has short-run cost function given by C(q) = 5+2q+9. The market price is $10. (a) What is the profit-maximizing output level for this firm? (b) What is the firm's total revenue and profits at the profit-maximizing output? (c) What is the minimum price at which the firm will produce a positive level of output in the short run?
3. Illustrate graphically Suppose that a competitive firms marginal cost of producing output 2 is given by MC(q)= 70+6q Assume that the market price of the firm's product is $145. A. At what level of output will the firm produce? B. How much is the firm's producer surplus? C. Illustrate graphically profit maximization point and producer surplus. D. Illustrate this market at a loss. Explain. 4. Graphically illustrate a perfectly competitive firm and a non-perfectly competitive firm side by side....
A perfectly competitive firm faces total cost of product as follows: TC = 0.1q2 + 10 + 50. a. If market price is $20/unit, find the output rate at which firm's profit is maximized. b. Find the firm's shut-down point. c. Find the firm's short-run supply function (express output q as a function of market price P). d. If there are 100 identical firms (have the same cost of production) in the market, determine market supply function.
Name 1. Describe a perfectly competitive market structure in terms of number of firms, ease of entry a and product differentiation. 2. Draw the short-ran cost and revenue curves for a firm making an economic profit in a perfectly petitive industry. Show the firm's short-run supply curve. 3. Why might a firm continue to produce at a loss in the short na instead of shutting down? a perfectly competitive firm will make an economie profit in the short b. fP-...
The market price is p=50
3. Consider a competitive firm with total costs given by TC(q) = 100 + 10q+q? (e) Graph the ATC, AVC, MC, and MR curves in a single graph, and indicate the profit maximizing level of output. If there are profits, shade the region corre- sponding to profit and label it. (f) If fixed costs increase from 100 to 500, what happens to the profit maximizing level of output, TR, TC, and a? (g) If fixed...
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