HomeworkLib
Question

Assume that a perfectly competitive firm has the following monthly revenue and cost functions: (show your...

Assume that a perfectly competitive firm has the following monthly revenue and cost functions: (show your work )

TC = 250,000 + 200Q + 0.02 Q^2

MC = 200 + 0.04Q

TR = 800Q

A) At Q = 5,000 units, compute TC, TVC and TFC.

B) What is the level of output that maximizes profit, if any? Compute profit, if any?

C) Should the firm continue to produce if MR falls to $300? why?

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

0 0
Add a comment
Know the answer?
Add Answer to:
Assume that a perfectly competitive firm has the following monthly revenue and cost functions: (show your...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 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...

  • Let TC = 3000 +100Q -12Q2 + Q3 Assuming the firm operates in a competitive market...

    Let TC = 3000 +100Q -12Q2 + Q3 Assuming the firm operates in a competitive market (MR=MC=P): Solve for the profit maximizing Q (label Q*) when P = 100. At this level of Q, calculate AFC, AVC, ATC, TFC, TVC, TC, TR and profits/losses. Should the firm shut down or continue to operate? Explain. Graph your calculations.

  • a perfectly competitive firm has the following cost functions: TC = 1000 + Q + 0.002Q^2...

    a perfectly competitive firm has the following cost functions: TC = 1000 + Q + 0.002Q^2 MC=1 + 0.004Q market price is 31 what is the firm's MR

  • A firm operates in a perfectly competitive market with a price of P = 50 for...

    A firm operates in a perfectly competitive market with a price of P = 50 for the product. TVC = 0.5Q3 − 18Q2 + 170Q Q (output) TFC = 300. Write an equation expressing the firm’s total revenue (TR) as function of Q. Write an equation expressing the firm’s total cost (TC), as a function of Q. Write an equation expressing the firm’s profit (π), as a function of Q.Find the first-order condition for the firm’s profit-maximization decision. Find the...

  • a perfectly competitive firm has the following cost functions: TC =1000 + Q + 0.002Q^2 MC...

    a perfectly competitive firm has the following cost functions: TC =1000 + Q + 0.002Q^2 MC =1 +0.004Q market price is 31 based on the profit maximization rule how much is the firm's total profit

  • a perfectly competitive firm has the following cost functions: TC =1000 + Q + 0.002Q^2 MC...

    a perfectly competitive firm has the following cost functions: TC =1000 + Q + 0.002Q^2 MC =1 +0.004Q market price is 31 based on a profit maximization rule how much is the firm's total cost

  • a firm in perfectly competitive market sells all its products Q at constant price p (1)A...

    a firm in perfectly competitive market sells all its products Q at constant price p (1)A firm in a perfectly competitive market sells all its product (Q) at a constant price (P) of $60. Suppose the total cost function (TC) for this firm is described by the following equation: 2 3 TC(Q) = 128 +690 - 140 + Q (a)Form the profit function and determine the output that maximizes the firm's profit. Evaluate the second order condition to assure that...

  • the firm faces a constant price (P) of $60 A firm in a perfectly competitive market...

    the firm faces a constant price (P) of $60 A firm in a perfectly competitive market sells all its product (Q) at a constant price (P) of $60. Suppose the total cost function (TC) for this firm is described by the following equation: 2 3 TC(Q) = 128 + 69Q - 140 + Q (a)Form the profit function and determine the output that maximizes the firm's profit. Evaluate the second order condition to assure that profit is maximized at this...

  • You are given the following cost and revenue data for Parkin’s Pickles, a perfectly competitive firm...

    You are given the following cost and revenue data for Parkin’s Pickles, a perfectly competitive firm at its current output level. TR = $1,680   TFC = $525   MC = $18     AFC = $5   AVC = $7 a. Is the firm making a profit or a loss? How much?                Profit or Loss  of $   . Is the firm producing the optimal output? If not, should it produce more, less, or none at all?     Output: No or yes  , it should produce...

  • 20. Which of the following statements is not a characteristic of a perfectly competitive firm? a....

    20. Which of the following statements is not a characteristic of a perfectly competitive firm? a. Perfectly competitive firms view each other as fierce rivals. b. Firms are price-takers. c. All firms produce a homogeneous product. d. Perfectly competitive markets allow freedom of entry and exit. 21. Since the firm’s demand curve is perfectly elastic for a price-taking firm, a. P = MR. b. P = MRP. c. P = TR. d. both a and b. e. both a and...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT