Proxy Computing Co. has the following costs: TC = 256 + 128Q + 8Q2 (i) Identify...
Proxy Computing Co. has the following costs: TC = 256 + 128Q + 8Q2
(i) Identify the fixed, variable and marginal costs. Does the cost structure represent a short-run or long-run cost structure? Why?
(ii) The market demand curve is: Q = 1000 – 2P and the supply curve is: Q = 3P. Proxy Computing is a small firm operating in this perfectly competitive market. Compute Proxy Computing’s profit-maximising quantity.
Homework Answers
(i)
FC = 256
TVC = 128Q + 8Q2
MC = dTC/dQ = 128 + 16Q
Since FC > 0, this is short run, since in long run FC = 0.
(ii)
Equating market demand and supply,
1000 - 2P = 3P
5P = 1000
P = 200
Q = 3 x 200 = 600
The firm equates market price with its MC:
128 + 16Q = 200
16Q = 72
Q = 4.5 (firm output)
Add Answer to:
Proxy Computing Co. has the following costs: TC = 256 + 128Q +
8Q2
(i) Identify...
R2.3) In a perfectly competitive market, each firm's costs are given by TC= 300Q-8Q2+0.2Q3 and MC=...
R2.3) In a perfectly competitive market, each firm's costs are given by TC= 300Q-8Q2+0.2Q3 and MC= 300 -16Q +0.6Q2. The market demand is given by QP= 54,000 -200P. Find the long run equilibrium price, assuming the cost equations above. [Answer: $220]
Suppose that each firm in a competitive industry has the following costs: Total Cost: TC =...
Suppose that each firm in a competitive industry has the following costs:Total Cost: TC=50+1/2 q2Marginal Cost: MC=qwhere q is an individual firm's quantity produced.The market demand curve for this product is:Demand QD=160-4 Pwhere P is the price and Q is the total quantity of the good.Each firm's fixed cost is $_______ What is each firm's variable cost?1/2 q50+1/2 q1/2 q^{2}qWhich of the following represents the equation for each firm's average total cost?50/q+1/2 q50+1/2 q50/q1/2 qComplete the following table by computing the...
Suppose that each firm in a competitive industry has the following costs: Total Cost: TC= 50+1/2...
Suppose that each firm in a competitive industry has the following costs: Total Cost: TC= 50+1/2 q^2 Marginal Cost: MC= q where qq is an individual firm's quantity produced. The market demand curve for this product is Demand QD=160−4PQD=160−4P where PP is the price and QQ is the total quantity of the good. Each firm's fixed cost is $_____ What is each firm's variable cost? q 50+1/2 q 1/2q 1/2q^2 Which of the following represents the equation for each firm's...
Short-Run Market Supply. New England Textiles, Inc., is a medium-sized manufacturer of blue denim that sells in a perfectly competitive market. Given $25,000 in fixed costs, the total cost function f...
Short-Run Market Supply. New England Textiles, Inc., is a medium-sized manufacturer of blue denim that sells in a perfectly competitive market. Given $25,000 in fixed costs, the total cost function for this product is described by TC $25,000 $1Q S0.000008 Q Mc= aTCaQ = $1 + $0.00001 6Q where Q is square yards of blue denim produced per month. Assume that MC> AVC at every point along the firm's marginal cost curve, and that total costs include a normal profit....
[1] A perfectly competitive aluminum producer is currently producing a quantity where the market price is...
[1] A perfectly competitive aluminum producer is currently producing a quantity where the market price is $0.67 per pound (i.e., 67 cents per pound), average total cost is $0.70, and average variable cost of $0.60 (which corresponds to the minimum point on the average variable cost curve). Would you recommend this firm expand output, contract output, or shut down in the short-run? Provide a graph to illustrate your answer. [2] Suppose the local crawfish market is perfectly competitive, with the...
Short-Run Market Supply. New England Textiles, Inc., is a medium-sized manufacturer of blue denim that sells in a perfe...
Short-Run Market Supply. New England Textiles, Inc., is a medium-sized manufacturer of blue denim that sells in a perfectly competitive market. Given $25,000 in fixed costs, the total cost function for this product is described by TC = $25,000 + $1Q+ $0.000008 Q2 MC = a Tc/aQ = $1 + $0.000016Q where Q is square yards of blue denim produced per month. Assume that MC > AVC at every point along the firm's marginal cost curve, and that total costs...
11. Problems and Applications Q11 Suppose that each firm in a competitive industry has the following...
11. Problems and Applications Q11 Suppose that each firm in a competitive industry has the following costs: Total Cost: TC=50+12q2TC=50+12q2 Marginal Cost: MC=qMC=q where qq is an individual firm's quantity produced. The market demand curve for this product is: Demand QD=140?2PQD=140?2P where PP is the price and QQ is the total quantity of the good. Each firm's fixed cost is. What is each firm's variable cost? 12q212q2 qq 50+12q50+12q 12q12q Which of the following represents the equation for each firm's...
cardboard boxes are produced in a perfectly competitive market. each identical firm has a short run...
cardboard boxes are produced in a perfectly
competitive market. each identical firm has a short run total cost
curve of TC= 3Q^3 - 12Q^2 +16Q + 100, where Q is measured in
thousands of boxes per week. calculate the output for the price
below which a firm in the market will not produce any output in the
short run. ( i.e., the output for the shut down price)
a 2^1/2
b. 2
c. 1/2
d. 1/square root of 2
2)...
11. Problems and Applications Q11Suppose that each firm in a competitive industry has thefollowing...
11. Problems and Applications Q11Suppose that each firm in a competitive industry has the
following costs:Total Cost: TC = 50 + Marginal Cost: MC = qThe market demand curve for this product is:Demand where P is the Price and Q is the total quantity of the
good..What is each firm's variable cost?0.5q50+0.5qqWhich of the following represents the equation for each firm's
average total cost?50q50+0.5q0.5qComplete the following table by computing the marginal cost and
average total cost for qq from 5...
A firm in a perfectly competitive market has a short-run total cost curve of ST C(Q)...
A firm in a perfectly competitive market has a short-run total cost curve of ST C(Q) = 20 + 10Q + Q2. The market price is $10. a) What is the profit-maximizing quantity? b) What are the maximum profits? c) Find the short-run supply curve if all fixed costs are sunk. d) Find the short-run supply curve if all fixed costs are non-sunk. e) Suppose there are 100 identical firms in this market. What is the market supply curve if...
R2.3) In a perfectly competitive market, each firm's costs are given by TC= 300Q-8Q2+0.2Q3 and MC= 300 -16Q +0.6Q2. The market demand is given by QP= 54,000 -200P. Find the long run equilibrium price, assuming the cost equations above. [Answer: $220]
Short-Run Market Supply. New England Textiles, Inc., is a medium-sized manufacturer of blue denim that sells in a perfectly competitive market. Given $25,000 in fixed costs, the total cost function for this product is described by TC $25,000 $1Q S0.000008 Q Mc= aTCaQ = $1 + $0.00001 6Q where Q is square yards of blue denim produced per month. Assume that MC> AVC at every point along the firm's marginal cost curve, and that total costs include a normal profit....
Short-Run Market Supply. New England Textiles, Inc., is a medium-sized manufacturer of blue denim that sells in a perfectly competitive market. Given $25,000 in fixed costs, the total cost function for this product is described by TC = $25,000 + $1Q+ $0.000008 Q2 MC = a Tc/aQ = $1 + $0.000016Q where Q is square yards of blue denim produced per month. Assume that MC > AVC at every point along the firm's marginal cost curve, and that total costs...
cardboard boxes are produced in a perfectly
competitive market. each identical firm has a short run total cost
curve of TC= 3Q^3 - 12Q^2 +16Q + 100, where Q is measured in
thousands of boxes per week. calculate the output for the price
below which a firm in the market will not produce any output in the
short run. ( i.e., the output for the shut down price)
a 2^1/2
b. 2
c. 1/2
d. 1/square root of 2
2)...
11. Problems and Applications Q11Suppose that each firm in a competitive industry has the
following costs:Total Cost: TC = 50 + Marginal Cost: MC = qThe market demand curve for this product is:Demand where P is the Price and Q is the total quantity of the
good..What is each firm's variable cost?0.5q50+0.5qqWhich of the following represents the equation for each firm's
average total cost?50q50+0.5q0.5qComplete the following table by computing the marginal cost and
average total cost for qq from 5...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago