Question

A price-taking firm's variable cost function is

* *
VC=3Q^{3},

where *Q* is its output per week. It has a sunk fixed cost
of $750 per week. Its marginal cost is

MC=9Q^{2}.

a. What is the firm’s supply function when the $750 fixed cost is
sunk?

**Instructions:** Enter your
answer as a whole number.

*Q* =
(*P*/9)^{0.5} for *P* ≥ $.

b. What is the firm’s supply function when the fixed cost is
avoidable?

** Instructions:** Enter
your answer as a whole number.

*Q* =
(*P*/9)^{0.5} for *P* ≥ $.

Answer #1

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A price-taking firm's variable cost function is
VC=3Q3,
where Q is its output per week. It has a sunk fixed cost
of $750 per week. Its marginal cost is
MC=9Q2.
a. What is the firm’s supply function when the $750 fixed cost is
sunk?
Instructions: Enter your
answer as a whole number.
Q =
(P/9)0.5 for P ≥ $.
b. What is the firm’s supply function when the fixed cost is
avoidable?
Instructions: Enter
your answer as a whole...

The daily demand for pizzas is
Qd = 750 - 25P
where P is the price of a pizza. The daily costs for a
pizza company initially include $50.00 in fixed costs (which are
avoidable in the long run but sunk in the short run), and variable
costs equal to
VC=(Q2/2),VC=(Q2/2),
where Q is the number of pizzas produced in a day.
Marginal cost is
MC=Q.MC=Q.
Suppose that in the long run...

Should a firm shut down if its revenue is R = $1,500 per week
and: a. its variable cost is VC = $1,100 and its sunk fixed cost is
F = $800? b. its variable cost is VC = $1,600 and its sunk fixed
cost is F = $600? c. its variable cost is VC = $1,100 and its fixed
cost is F = $1000 ($800 of which is avoidable if it shuts down?

Currently, a monopolist’s profit-maximizing output is 500 units
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firm’s total costs are $7,000 per week. The firm is maximizing its
profit, and it earns $35 in extra revenue from the sale of the last
unit produced each week.
Instructions: Enter your answers as whole
numbers.
a. What are the firm's weekly economic profits?
b. What is the firm's marginal cost?
c. What is the firm's...

Suppose the daily demand function for pizza in Berkeley is
Qd=1,525−5P.Qd=1,525−5P.
The variable cost of making Q pizzas per day is
C(Q)=3Q+0.01Q2.C(Q)=3Q+0.01Q2.
There is a $100 fixed cost (which is avoidable in the long run),
and the marginal cost is
MC=3+0.02Q.MC=3+0.02Q.
Instructions: Enter your answers about price to
two decimal places. Enter your answers about quantities to the
nearest whole number.
a. If there is free entry in the long run, what is the long-run
market equilibrium...

Suppose the daily demand function for pizza in Berkeley is
Qd=1,525−5P.Qd=1,525−5P.
The variable cost of making Q pizzas per day is
C(Q)=3Q+0.01Q2.C(Q)=3Q+0.01Q2.
There is a $100 fixed cost (which is avoidable in the long run),
and the marginal cost is
MC=3+0.02Q.MC=3+0.02Q.
Instructions: Enter your answers about price to
two decimal places. Enter your answers about quantities to the
nearest whole number.
a. If there is free entry in the long run, what is the long-run
market equilibrium...

A competitive firm's cost of production q units of output is C =
18 + 4q + q2 . Its corresponding marginal cost is MC= 4
+ 2q.
a. The firm faces a market price p= $48. Create a spreadsheet
with q = 0, 1, 2, ... 30, where the columns are q, R, C, VC, AVC,
MC, and profit. Determine the profit-maximizing output for the firm
and the corresponding profit. Should the firm produce this level of
output or...

Suppose that the production function for Hannah and Sam’s home
remodeling business is Q=F(L,K) Q=10L^0.2K^0.3. The wage rate is
$1,500 per week and the cost of renting a unit of capital is $1,000
per week.
What is their cost function? Instructions:
Enter your answer as a whole number. C(Q) = Q2.

A monopolist's maximized rate of economic profits is $200 per
week. Its weekly output is 200 units, and at this output rate,
the firm's marginal cost is $39 per unit. The price at which it
sells each unit is $51 per unit.
At these profit and output rates, the firm's average total
cost is $___(Enter your response as a whole number.)
At these profit and output rates, the firm's marginal revenue
is $___(Enter your response as a whole number.)

Suppose that the production function for Hannah and Sam’s home
remodeling business is
Q=F(L,K)Q=F(L,K)
Q=10L0.2K0.3.Q=10L0.2K0.3.
The wage rate is $1,500 per week and the cost of renting a unit of
capital is $1,000 per week. What is their cost function?
Instructions: Enter your answer as a whole
number.
C(Q) = Q2.

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