If c ( q ) = 100 + 4 q 2 and q ∗ = 16,...
If c ( q ) = 100 + 4 q 2 and q ∗ = 16, then we know that the market price must be:
Homework Answers
Ans) market price must be: $ 128
At Profit maximization, P = MC
MC = dC/dQ = 8q
Given Q = 16 implies MC = 16*8 = 128 so price = 128
consider a market with inverse demand curve p=400-4Q. costs per firm are given by C(q)= 16+10q+q^2...
consider a market with inverse demand curve p=400-4Q. costs per firm are given by C(q)= 16+10q+q^2 a) find the minimum efficient scale output level b) in a competitive market , how many firms will be active in the long-run c) suppose we have a cournot oligopoly with n firms . determine output of each firm and the equilibrium price d) find the long run equilibrium number of firms if the market is a cournot oligopoly and entry occurs until profit...
Suppose we have a market demand Q = 18 – P and a cost C(Q) 9)...
Suppose we have a market demand Q = 18 – P and a cost C(Q) 9) = 3Q?. 1 Suppose we realize that the market described in question 1 (Market demand is still Q = 18 – P) has a negative externality. The cost function Cp(Q) -Q2 is private cost. We 2 now know the cost of the externality is CE(Q) = Q2. a. What is the marginal cost of the externality, MCE? b. What is the marginal cost to...
A. Q=4 B. Q=8 C. Q=10 D. Q=12 The graph below shows the average total cost...
A. Q=4
B. Q=8
C. Q=10
D. Q=12
The graph below shows the average total cost and marginal cost curves of a perfectly competitive firm. If the market price is $7, what is the output level that maximizes the firm's profit? 12 11 10 MC ATC 9 8 Price $/Q 4 3 2 0 2 3 4 5 9 10 11 12 دفا 14 15 16 6 7 8 Quantity
An industry consists of two firms with identical costs C(q) = 5q + q^2/2. The market...
An industry consists of two firms with identical costs C(q) = 5q + q^2/2. The market demand is Q = 125 − p. What is the equilibrium price, quantity per firm, and profit per firm, if we use the Bertrand Model to analyze this market? Assume that consumers can notice infinitesimally small differences in price.
A) Q > 4 B) Q < 4 C) Q > 8 D) Q< 8 The...
A) Q > 4
B) Q < 4
C) Q > 8
D) Q< 8
The graph shows a firm's average total cost (ATC) and marginal cost (MC) curves. At what output level does the firm have economies of scale? 12 11 10 MC ATC 9 8 Price $/Q 4 3 2 - 0 0 2 3 4 5 6 7 8 10 11 12 13 14 15 16 Quantity
(16 points) Cournot Duopoly. Market demand is p(Q) = 50 – 4Q, where Q = 4+...
(16 points) Cournot Duopoly. Market demand is p(Q) = 50 – 4Q, where Q = 4+ 42. Firm 1's cost function is C (91) = 0, and firm 2 has a cost function C2(92) = 1092- The two firms engage in Cournot competition; they simultaneously choose a quantity and the price adjusts so that the market clears. (a) Formally write firm 1's profit maximization problem (b) Find firm l's best response function. (c) Take as given that firm 2's best...
4. A monopolist faces a market demand defined by P 20. There are no fixed costs. 100 (1/5)Q. Her ...
4. A monopolist faces a market demand defined by P 20. There are no fixed costs. 100 (1/5)Q. Her marginal cost is given by MC (a) Graph the market demand, the marginal revenue curve and the marginal cost curve, labeling the intercepts. (5 marks) (b) Calculate the monopolist's profit-maximizing price, output and profit. (5 marks) (c) Suppose that this market can now be divided into two separate markets and the supplier can discriminate between them. The demand curves are given...
An industry currently has 100 firms, all of which have fixed costs of $16 and avg
An industry currently has 100 firms, all of which have fixed costs of $16 and avg. variable cost as follows: Q Avg. Variable Cost ($) 1 1 2 2 3 3 4 4 5 5 6 6 a. Compute marginal cost and avg. total cost. b. the price is $10. what is the total quantity supplied in the market? c. as this market makes the transition to its long-run equilibrium, will the price rise or fall? will the quantity demanded...
2. An industry consists of many identical firms, each with the cost function C(q) = 100...
2. An industry consists of many identical firms, each with the cost function C(q) = 100 + 30q – 8q2 + q3 a. Derive the average cost, average variable cost, and marginal cost curves of a firm. b. Compute the outputs at which the AC and AVC curves reach their minimums. C. If the market price is $40, and each firm is a price-taker, how much output will each firm supply? d. How much profit or loss is each firm...
Suppose we have a market demand Q = 18 – P and a cost C(Q) 9) = 3Q?. 1 Suppose we realize that the market described in question 1 (Market demand is still Q = 18 – P) has a negative externality. The cost function Cp(Q) -Q2 is private cost. We 2 now know the cost of the externality is CE(Q) = Q2. a. What is the marginal cost of the externality, MCE? b. What is the marginal cost to...
A. Q=4
B. Q=8
C. Q=10
D. Q=12
The graph below shows the average total cost and marginal cost curves of a perfectly competitive firm. If the market price is $7, what is the output level that maximizes the firm's profit? 12 11 10 MC ATC 9 8 Price $/Q 4 3 2 0 2 3 4 5 9 10 11 12 دفا 14 15 16 6 7 8 Quantity
A) Q > 4
B) Q < 4
C) Q > 8
D) Q< 8
The graph shows a firm's average total cost (ATC) and marginal cost (MC) curves. At what output level does the firm have economies of scale? 12 11 10 MC ATC 9 8 Price $/Q 4 3 2 - 0 0 2 3 4 5 6 7 8 10 11 12 13 14 15 16 Quantity
(16 points) Cournot Duopoly. Market demand is p(Q) = 50 – 4Q, where Q = 4+ 42. Firm 1's cost function is C (91) = 0, and firm 2 has a cost function C2(92) = 1092- The two firms engage in Cournot competition; they simultaneously choose a quantity and the price adjusts so that the market clears. (a) Formally write firm 1's profit maximization problem (b) Find firm l's best response function. (c) Take as given that firm 2's best...
4. A monopolist faces a market demand defined by P 20. There are no fixed costs. 100 (1/5)Q. Her marginal cost is given by MC (a) Graph the market demand, the marginal revenue curve and the marginal cost curve, labeling the intercepts. (5 marks) (b) Calculate the monopolist's profit-maximizing price, output and profit. (5 marks) (c) Suppose that this market can now be divided into two separate markets and the supplier can discriminate between them. The demand curves are given...
2. An industry consists of many identical firms, each with the cost function C(q) = 100 + 30q – 8q2 + q3 a. Derive the average cost, average variable cost, and marginal cost curves of a firm. b. Compute the outputs at which the AC and AVC curves reach their minimums. C. If the market price is $40, and each firm is a price-taker, how much output will each firm supply? d. How much profit or loss is each firm...
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