Question

Suppose a firm operates in a perfectly competitive market where every firm has the same cost function given by: C(q)=5q2+q+20

Suppose the market price changes. Below what price will this firm shut down? (what is the "shut-down price").

Sandboxes are produced according to the following cost function:

c(q) = q^{2} + 100

where the fixed cost of 100 represents an annual license fee the
firms pay. Every firm uses the same technology to produce sanboxes.
Recent trends have increased the demand to Q_{D}=2250–5p.
In the short run, what will be the new equilibrium price?

Suppose demand remains high at Q_{D}=2250–5p in the long
run. What will be the long-run equilibrium price?

Answer #1

Suppose a representative perfectly competitive firm has the
following cost function: TC = 100 + 5Q2. The short-run
market demand and supply are given by: QD = 600 - 40P
and QS = 20P. How many firms are in the market in the
short-run?

4) A perfectly competitive market is characterized by every firm
having the following cost structure: C = 100 + q2. In
long-run equilibrium, what is the equilibrium quantity of output
(Q)?
The inverse market demand is P = 1,020 - Q.
Question 4 options:
Q = 1,000
Q = 200
Q = 500
Q = 800
5) A perfectly competitive market is characterized by every firm
having the following cost structure: C = 100 + q2. In
long-run equilibrium, how...

Consider a perfectly competitive market where the market demand
curve is p(q) = 1000-q. Suppose
there are 100 firms in the market each with a cost function c(q)
= q2 + 1.
(a) Determine the short-run equilibrium.
(b) Is each firm making a positive profit?
(c) Explain what will happen in the transition into the long-run
equilibrium.
(d) Determine the long-run equilibrium.

Suppose a representative firm in a perfectly competitive
industry has the following total cost of
production in the short run: TC = Q3 - 60Q2 +
3000Q.
a) What will be the long run equilibrium quantity for the firm?
What will be the long run
equilibrium price in this industry?
b) If the industry demand is given by QD = 12400 -
4P. how many firms will be active in the long-
run equilibrium?
c) Suppose the firm faces a...

2. Suppose a representative firm producing in a perfectly
competitive industry has the following cost function: C(q) = q2 +
8q + 36 a. Solve for the firm’s average cost function. b. At what
level of q is average cost minimized (i.e. what is the minimum
efficient scale for the firm)? What is the value of average cost at
this level of q? c. Suppose all firms in this industry are
identical and the demand function for this industry is...

Suppose that the perfectly competitive for market for milk is
made up of identical firms with long-run total cost functions given
by:
TC = 4 q3 - 24 q2 + 40 q
Where, q = litres of milk. Assume that these cost functions are
independent of the number of firms in the market and that firms may
enter or exist the market freely.
If the market demand is :
Qd = 8,000 - 160 P
1. What is the long-run...

suppose that perfectly competitive baseball industry has a large
number of potencial entrants. each firm has the same cost structure
such that the long run average cost is minimized at 210 baseball
per day (q= 210). the firms minimum long run average cost is $0.10.
total market demand is given by Qd= 400 - 100p.
A. what is the industry’s long run supply schedule?
B. what is the long run equilibrium price (P*) and total
industry output (Q*)?
C. graph...

The long run cost function for each (identical) firm in a
perfectly competitive market is C(q) =
q1.5 + 16q0.5 with long run
marginal cost given by LMC = 1.5q0.5 +
8q-0.5, where q is a firm’s
output. The market demand curve is Q = 1600 –
2p, where Q is the total output of all
firms and p is the price of output.
(a) Find the long run average cost curve for the firm. Find the
price of output and the amount of output...

Consider a perfectly competitive market where the market demand
curve is p(q) = 1000 − q. Suppose there are 100 firms in the market
each with a cost function c(q) = q2 + 1.
(a) Determine the short-run equilibrium. (b) Is each firm making
a positive profit?
(c) Explain what will happen in the transition into the long-run
equilibrium.
(d) Determine the long-run equilibrium.

Question 3
The long run cost function for each (identical) firm in a
perfectly competitive market is C(q) =
q1.5 + 16q0.5 with long run
marginal cost given by LMC = 1.5q0.5 +
8q-0.5, where q is a firm’s
output. The market demand curve is Q = 1600 –
2p, where Q is the total output of all
firms and p is the price of output.
(a) Find the long run average cost curve for the firm. Find the
price of output and the amount...

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