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Consider a firm with the cost function C (Q) Q2 + 20Q + 150. Imagine the...
Beta Laundry's cost function is C(q)equals=70+24q+q^2. How much does it produce if p=$60? The firm produces q=______units. (Enter your response as a whole number.)If the government imposes a per unit tax of t=22, what quantity maximizes its after-tax profit? (Hint: per unit tax increases firm's MC and AVC by the amount of tax, for instance if per unit tax is 2 dollars, MC increases by 2 dollars and AVC increases by 2 dollars) With the tax, the profit-maximizing quantity for...
In a perfectly competitive market, a firm has the following short-run total cost function: C(q)=16+4q+q2 The market demand is Q(p)=220-p a. Show that marginal cost curve passes through the minimum point of average cost curve. Draw a figure to show it. b. Find the firm’s individual short-run supply function. Draw it on the above figure. For the following questions, suppose that there are currently 10 identical firms in this market. c. What is the market supply curve? What are the...
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...
Consider a firm with short-run cost function C(q) = q2 + 10 + 25, where 25 represents fixed costs. In the short-run, how much should the firm supply to maximize profits if the price is p= 12? (round your answer to one decimal place if necessary)
Suppose that each firm that sells cases of jelly-beans has a cost function of C(q) = 25 + q2+q and that the market demand for jelly-beans is QD = 52 – 2∙P. A) What is the short-run industry supply curve? B) Suppose that in the interest of jelly-bean consumers, the government mandates that cases of jelly-beans can only be sold for $10. Use the short-run supply curve to find the dead-weight loss associated with this policy?
А - ВО, 2. A competitive where Q is the market output. Each firm in the industry has the same cost function, c(q) q?. A industry has a linear market demand: p _ (i) Suppose there are n firms in this industry in the short-run. What is the short-run equilibrium price? Calculate the total consumer surplus at this short-run equilibrium. (ii) Suppose now the government imposes a per-unit tax t > 0, to be paid by the firms. What is...
Suppose the production function of a firm is given by q = L1/4K1/4. The prices of labor and capital are given by w = $10 and r = $20, respectively. a) Write down the firm's cost minimization problem. b) What returns to scale does the production function exhibit? Explain c) What is the Marginal Rate of Technical Substitution (MRTS) between capital and labor? d) What is the optimal capital to labor ratio? Show your work. e) Derive the long run...
Consider a firm with the following cost function: C (q) = 4q^2 + 100 Find the long-run supply and the short-run supply of the firm, under the assumptions that the total cost function is the same in the long and in the short run, but the xed cost is sunk in the short run.
A firm uses labor (L) and capital (K) as inputs, and has a short run cost function C=15+ 10q+ q2. Capital is fixed at K̅ a. Give the formula for the firm's marginal cost function. Any method of deriving the marginal cost function is acceptable. (Hint: When calculating MC, you can assume that increases by a very, very small amount, so that q2 = q1 + ε ≈ q and q1 + q2 ≈ 2q.) b. Give the formula for the firm's...
Suppose that the cost function of a firm is C(q)=4q. Suppose that this is the only firm in the market, and demand is Q(p)=10-p. What is the Producer Surplus in a competitive equilibrium in this economy if the government imposes an advalorem tax of 20% (this means that if the firm sells at price p, the government receives 0.2p per unit sold)? 6 12 1 0 2