Question 2 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? 2 1 6 0 12
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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
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- Suppose that a competitive firm's marginal cost of producing output q (MC) is given by Assume that the market price (P) of the firm's product is $15. What level of output (q) will the firm produce? The firm will produce units of output. (Enter your response rounded to two decimal places.) What is the firm's producer surplus? Producer surplus (PS) is $ (Enter your response rounded to two decimal places.) Suppose that the average variable cost of the firm (AVC) is given by MC(q)=3+2q. AVC(q)=3+1q. Suppose that the firm's fixed costs (FC) are known to be $50. Will the firm be eaming a positive, negative, or zero profit in the short run? In the short run, the firm's profit will be positive Enter your answer in each of the answer boxes.Let us consider an economic sector characterized by the following data. The (inverse) demand function is p = 20 -2g with q the quantities produced by the firms in the sector and p the price. The total cost of production for any firm in the sector is: CT(a) = q* - 4g +5 a) First, assume that there is only one firm, firm 1, in the industry. Calculate the price, quantity produced and profit of firm 1 in a monopoly situation that wants to maximize its profit b) Firm 1 seeks to deter the entry of another firm, firm 2, into its market through a sustainable monopoly strategy. Calculate the equilibrium price, quantity and profit of firm 1 given this strategyQuestion 5 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 Consumer Surplus in a competitive equilibrium in this economy? 18 36 20 12 15
- 497 + 4q3, A firm in the competitive market produces two goods, 1 and 2. The firm face a cost function C(q1, 92) where q1 and q2 are the quantity of good 1 and 2 produced by the firm respectively. The price of good 1 is 8 and the price of good 2 is 4. What is the profit maximizing production quantity for the firm? 1 a. q1 = 1, 92 = b. q1 = 1, q2 = 1 c. 91 = , 92 = 1 d. q1 = 0, q2 = 0In a given market three firms compete by choosing quantity simultaneously. The demand schedule is this market is P(Q) = 300 – 2Q. All the firms have the same cost function: C(q) = 140q - 100. (i) What is the equilibrium price, the quantity produce by each firm, the profit earned by each firm and the consumer surplus? Carefully explain your derivation and provide reasoning.The market demand for Gucci bags is given by the function P = 75 - 1.5Q. P is price per bag, and Q is output per time period. The market supply is given as P = 25 + 0.50Q. A typical competitive firm that markets this type of bag has a marginal cost of production of MC = 2.5 + 10q. a) Calculate the market equilibrium price for the bags as well as the output rate in the market. b) Calculate how much the typical firm will produce per time period at the equilibrium price. c) If all firms had the same cost structure, how many firms would compete at the equilibrium price computed in (a) above?
- The following relations describe monthly demand and supply for a wheat Qp = 32 – P Qs = P- 16 where P is the price (in cents) per pound and Q is the quantity (in millions) of pounds. What is the equilibrium price and output level? (a) Suppose that wheat industry is a perfectly competitive industry consisting of a large number of identical firms. For a typical firm, the cost function is TC = 100 + 1000q². (b) Identify the marginal revenue of a typical firm in the industry. (c) (d) Find the profit maximizing level of output produced by a firm. If all firms are profit maximizing, then how many firms can operate in this industry?The demand for bicycles is given by the equation: Q = 1000 - 5P There are currently 100 identical firms in this competitive market, each with the cost function: 25 C(q) =9 +20q + 50 2 %3! Calculate the short-run market equilibrium, including the market price and quantity, the number of units each firm will produce, and the profits of each firm. How much profit and producer surplus is each firm earning? a) b) If the government imposes a per unit tax of $90 per bicycle, how would this change the market equilibrium? How would the tax burden be shared by the consumers and bicycle manufacturers? c) If the government decides not to impose the tax, what is the long run equilibrium to include the market price and quantity, and the number of firms in the market? Assume the costs of the firms stay the same in the long run.Use the following to answer questions (1) - (14): Suppose the local market for flat glass, considered a homogeneous product, consists of two firms, A and B. The market demand is given as: Q = 40 - 2P, where Q is the market quantity and P is the price. A's total cost (TC) is: TC, = 6°q4, where q, is the quantity produced and sold by A B's total cost (TC3) is: TC, = 8q2, where qg is the quantity produced and sold by B [1] The market structure these two firms operate in is definitely not monopolistic competition. A. True В. False [2] Behaving as Cournot competitors, at the Nash equilibrium A produces a quantity closest in value to: A. 9 В. 11 C. 13 D. 15 [3] Behaving as Cournot competitors, at the Nash equilibrium the market quantity is closest in value to: A. 10 В. 13 С. 17 D. 20 [4] Behaving as Cournot competitors, at the Nash equilibrium the market price is closest in value to: A. 9 В. 11 C. 15 D. 19 [5] Behaving as Cournot competitors, at the Nash equilibrium B's profit is closest in…
- Under perfect competition, if the market demand function is Qdx = 120-20Px and the market supply function is Qsx = 20Px, what units are the total consumer surplus and producer surplus?A market is at long-run equilibrium of P* = S194 and Q* = 76800 units. All firms in the market are identical, and each has a marginal cost curve of P = 2 + 2g, where g is the quantity produced by that firm only. How many firms exist in the market? Answer:consider a market with a large number of firms, an upward sloping supply curve S0, and a downward sloping demand curve D0. We will start with the assumption that the market is perfectly competitive; hence, the supply curve S0 is the sum of the marginal cost curves of all the firms. Assume the market is perfectly competitive. Indicate the original competitive equilibrium price P0, equilibrium quantity Q0, the resulting Consumer Surplus CS0, the resulting Producer Surplus PS0, and the “socially optimal” output (the output the Benevolent Dictator would choose) QSO on your graph. Graphically indicate the size of Dead-Weight Loss DWL0 if there is such a loss. Question - Now suppose that scientists discover that this particular product has a significant Positive Externality. The Demand curve is a depiction of marginal private benefit (MPB). However, the existence of the positive externality means that for every given output level, Marginal Social Benefit (MSB) is higher than Marginal…