Question

Use the following information to answer the next three questions. Consider a perfectly competitive market with identical firms with the following cost function: C(q)=0.1q2+1000

The market demand is QD=1000-p

30) The supply function for an individual firm in the market can be written: a) qs =0.2q B) qs=5p C) qs =10p D) p=20

31) Suppose there are 20 firms in the market. The short-run market supply is A) p=20 B) QS=100p C) QS=200p D) None of the above

32) The long-run equilibrium will consist of how many firms? A) 10 B)18 C) 20 D) 200

Answer #1

Use the following information to answer the next three questions. Consider a perfectly competitive market with identical firms with the following cost function: C(q)=0.1q2+1000. This makes the marginal cost function MC = 0.2q.

The market demand is QD=1000-p

30) The supply function for an individual firm in the market can be written as MC = P or P = 0.2q. This becomes qs = 5P. B) qs=5p

31) Suppose there are 20 firms in the market. The short-run market supply is 20qs = Qs = 20*5p or 100P. B) QS=100p

32) The long-run equilibrium will have a price of P = MC = AC. Here AC = 1000/q + 0.1q so that we have

0.2q = 1000/q + 0.1q

q = 100 and so MC = 0.2*100 = $20. When P = $20, Qd = 1000 - 20 = 980. This implies that number of firms = 980/100 = 9.8. A) 10

1. n number of firms operate in a perfectly competitive market
in the long run. The marginal cost for each rm is MC = 30 − 16q +
3q 2 and the average cost is AC = 30 − 8q + q 2 . The market demand
is QD = 4600 − 100P. Determine the individual supply by each rm,
the market price, and the number of rms (n).

Consider a market where the demand is given by Y = 2, 400 − 200p
(i.e., the inverse demand is p = 12 − 0.005Y)
Assume for the moment that this market is perfectly competitive.
In the short-run, there are 50 identical firms operating in this
market with cost function c (yi) = 0.25yi^ 2 + 100. Find
i. an individual firm's supply function,
ii. the industry supply function,
iii. the market price and the total quantity sold in the...

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?

In a perfectly competitive market, market demand is QD = 380 –
2P and market supply is QS = 2P - 20. Each
firm has short-run MC = 5Q and ATC = 2.5Q + (100/Q) (ATC is at
minimum when Q = 6.32).
4. How much output will each firm produce?
a.
180
b.
10
c.
20
d.
100
5. What is the profit/loss for each firm in the short-run?
a.
$-7, 000
b.
$900
c.
$2, 500
d.
$0...

In the short run there are 400 firms in a perfectly competitive
market, all with the same total cost function: SRTC = 2.5q2 + 5q +
40. Suppose the market demand curve is represented by P = 165 -
0.0875Q. The profit earned by each firm in the short run is
a. $0
b. -$40
c. -$50
d. $30
e. $75
Each firm in a perfectly competitive market has long-run total
cost represented as LRTC = 100q2 - 10q +...

2. Consider a perfectly competitive market with market supply
Qs=-2+P and market demand Qd = 30-P. What is
consumer surplus in this market?

1. Which of the following statements is correct?
a.
In a perfectly competitive market, if the entry of new firms has
no effect on input prices, the long-run supply curve is horizontal
at the long-run equilibrium price.
b.
In a perfectly competitive market, if the entry of new firms
increases input prices, the long-run supply curve is upward
sloping.
c.
In a perfectly competitive market, if the entry of new firms
reduces input prices, the long-run supply curve is downward...

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 perfectly competitive market consists of identical
firms with the same cost function given by
C(q)=2q2 +3q + 400
The market demand is
QD= 5800 - 4p
How many firms will operate in this market in the long
run?
Round your answer to the nearest whole number.

Consider a perfectly competitive firm with a cost function of
?(?) = 50 + 2? + 2/3 q2
a. Solve for the firm’s supply function.
b. If there are 20 firms in the market and they are all
identical, what is the equilibrium price if market demand is given
by ?D(?) = 1,970 − 25? ?
c. Is the market in long run equilibrium? If not, what changes
would you expect? Explain your answer and show your work.
Please show...

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