The market determined price in a perfectly competitive industry is P = Rs. 10. Suppose that the total cost equation of an individual firm in the industry is given by the expressionTC 1000+2Q+0.01Q2 What is the firm’s profit-maximizing output level and profit? Is this profit normal profit or supper normal profit? Justify your answer

The market determined price in a perfectly competitive industry is P = Rs. 10. Suppose that the total cost equation of an individual firm in the industry is given by the expressionTC 1000+2Q+0.01Q2 What is the firm’s profit-maximizing output level and profit? Is this profit normal profit or supper normal profit? Justify your answer

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter12: Firms In Perfectly Competitive Markets

Section: Chapter Questions

Problem 9P

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Consider the following cost curve for a firm in a competitive industry where the market price equals $150. C =-9 + 6q + 1,500. What is the firm's marginal cost (MC)? MC =- (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a superscript can be created with the ^ character.) At what level of output does the firm maximize profits (minimize losses)? Profit is maximized at units of output. (Round your answer to two decimal places.) What is the firm's profit maximizing price? The profit-maximizing price is $. (Round your response to the nearest dollar.) What is the firm's profit? The firm earns a profit of $. (Round your response to the nearest penny.) In the short-run, this firm should DEC 20 étv MacBook Air 80 DII F2 F3 F4 F7 FB F9 @ %23 $ & 3 4 5 6 7 8 9 W E Y P S D F H J K ? C V N M command option nd .. .- リ * 00 R
Consider the following cost curve for a firm in a competitive industry where the market price equals $150. C= =q° + 6q + 1,500. What is the firm's marginal cost (MC)? MC = 150. (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a superscript can be created with the ^ character.) At what level of output does the firm maximize profits (minimize losses)? Profit is maximized at 12 units of output. (Round your answer to two decimal places.) What is the firm's profit maximizing price? The profit-maximizing price is $ (Round your response to the nearest dollar.) What is the firm's profit? The firm earns a profit of $. (Round your response to the nearest penny.) In the short-run, this firm should shut down produce DEG tv 20 MacBook Air PII SO F11 F12 FS F10 F9 F6 F7 F2 F3 F4 & #3 $ 4 6 7 8 - 2 3 { E R Y P Q А F G H J K L D ? C V M command option command .. .- レ Λ.
Consider the following cost curve for a firm in a competitive industry where the market price equals $150. C = + 6g + 1,500. What is the firm's marginal cost (MC)? MC =- (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a superscript can be created with the ^ character.) At what level of output does the firm maximize profits (minimize losses)? Profit is maximized at units of output. (Round your answer to two decimal places.) What is the firm's profit maximizing price? The profit-maximizing price is $- (Round your response the nearest dollar.) What is the firm's profit? The firm earns a profit of $. (Round your response to the nearest penny.) In the short-run, this firm should shut down produce E 20 étv MacBook Air 80 DII DD F2 F3 F4 F8 ! @ # 2$ & 2 3 4 5 7 8 9 Q W E R Y P A S D F G H K C V B M ption command comman N
Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + 1/2q2 Marginal cost: MC = q where q is an individual firm's quantity produced. The market demand curve for this product is Demand: QD where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market. = 120 – P а. What is each firm’s fixed cost? What is its variable cost? Give the equation for average total cost. b. Graph average-total-cost curve and the marginal-cost curve for q from 5 to 15. At what quantity is average-total-cost curve at its minimum? What is marginal cost and average total cost at that quantity? с. Give the equation for each firm's supply curve. d. Give the equation for the market supply curve for the short run in which the number of firms is fixed. е. What is the equilibrium price and quantity for this market in the short run? In this equilibrium, how much does each firm produce? Calculate each firm's profit or ^ loss. Is there…
Kyle owns a foreign used car dealership which sells the 2020 Toyota Aqua Hybrid. His total cost function is given by TC = 2q4 - 7q3 + 3q - 1845. His profit maximizing quantity is 24 cars. What is the long-run price of his Toyota Aqua Hybrid, in a perfectly competitive industry?
A perfectly competitive firm sells its product at a price of$0.10 per unit. Its total and marginal cost functions are: TC= 5 - 0.SQ + 0.001Q2 MC= -0.5 + 0.002Q, where TC is total cost($) and Q is output rate (units per time period). Solve for the profit maximizing quantity for this firm. My Question: in order to determine just profit maximizing quanitity, do we make MR=MC so the equation would be 0.10 = -0.5 + 0.002Q. Solve for Q then plug that number into the Q in the total cost equation to get the profit maximizing quantity?
Consider the market for ice cream. Suppose that this market is perfectly competitive. The cost structure of the typical ice cream producer is as follows. Average total cost is equal to 50 1 1 ATC(Q) +÷Q, average variable cost is equal to AVC(Q) =;Q, and marginal cost is equal to 2 MC(Q) = Q. Now, suppose that a new scientific study comes out that shows that soil pollution from rock salt (a key input for making ice cream) is extremely hazardous to human health. In response, the government decides to impose harsh re-zoning restrictions on any land once used for making ice cream. This reduces the market rent for land used to make ice cream, which in turn lowers the opportunity cost of operating an ice cream factory. This reduction in the opportunity cost of capital causes the total fixed cost of ice cream production to fall to 32, but there is no change to variable cost. Give formulas for the typical ice cream producer's new average total cost curve ATC(Q) and marginal cost curve MC(Q).
A gizmo producer operates in a perfectly competitive market with a price of $100 for a can of gizmos. The gizmo producer has a marginal cost curve equal to 0.52q, where q is the number of cans of gizmos produced. The gizmo producer currently produces 192 cans of gizmos. Should the gizmo producer produce 193 cans of gizmos instead? No, the marginal cost of the 192nd box is above marginal revenue, so production is already too high. No, while the marginal cost of the 192nd box is below marginal revenue, the marginal cost of 3rd box is above it, so profit is already maximized. None of these answers. Yes, the marginal cost of the 192nd box is below marginal revenue, so production is too low, and profits are not maximized. 20 MacBook esc 20 F3 OOD F1 F2 F4 2$ W R tab 6 5 %A4 %# 3
Suppose that each firm in a competitive industry has the following costs: Totalcost:TC=50+1/2q2 Marginalcost:MC=q where q is an individual firm's quantity produced. The market demand curve for this product is Demand:QD=120−P where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market.a. What is each firm's fixed cost? What is its variable cost? Give the equation for average total cost.b. Graph average-total-cost curve and the marginal-cost curve for qfrom 5 to 15. Atwhat quantity is average-total-cost curve at its minimum? What is marginal cost and averagetotal cost at that quantity?c. Give the equation for each firm's supply curve.d. Give the equation for the market supply curve for the short run in which the number of firms is fixed.e. What is the equilibrium price and quantity for this market in the short run?f. In this equilibrium, how much does each firm produce? Calculate each firm's profit or loss. Is there incentive for firms to…
Consider the following cost curves faced by each firm: TC = 60 +0.5q and MC = q, where q is the individual output for each firm in a perfectly competitive market. Assume the market demand is described by theequation: Q = 100 - 2P where Q is the market output in 100s of units. Currently, the market price is $10. What would one expect to happen in this market in the long run? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. Forko In the long run, firms will either enter or exit the market. a b. In the long run, firms will enter the market. In the long run, firms will exit the market. In the long run, firms will neither enter nor exit the market.
Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + 1/2q2 Marginal cost: MC = q Where q is an individual firm’s quantity produced. The market demand curve for the product is: Demand: QD = 120 – P Where P is the price and Q is the total quantity of the good. Currently there are 9 firms in the market. What is each firm’s fixed cost? What is its variable cost? Give the equation for average total cost. Graph the average-total-cost curve and the marginal-cost curve for q from 5 to 15. At what quantity is the average-total-cost curve at its minimum? What is the marginal cost and average total cost at that quantity? Give the equation for each firm’s supply curve. Give the equation for the market supply curve for the short run in which the number of firms is fixed. What is the equilibrium price and quantity for the market in the short run? In this equilibrium, how much does each firm produce? Calculate the firm’s profit and loss. Do firms have…
Assume that a firm in a competitive market faces the following cost information. If the market price for this firm's product is $40, calculate the profit maximizing level of output for this firm using marginal analysis. It may help to create your own cost table and fill in columns for Marginal Cost and Average Total Cost based on the Total Cost information below. a.What is the level of profit for this firm at the profit maximizing output? b.To convince yourself that the quantity you found is indeed the profit maximizing quantity, try calculating what the profit would be at the next higher level of output. What did you find? c. What do you predict will happen in this market over the long run?