Question

Competitive Market :

The market demand is Q = 2600-100P

there are 100 identical firms in the market, each with

Total cost TC = 0.25q^2 + 20q + 16

Marginal cost MC = 0.5q + 20

P = market price

Q = market output

q = output of individual firm

A. calculate the market equilibrium price and output.

B. Calculate a firm's profit or loss at the market equilibrium

Answer #1

A competitive industry currently consists of 50 identical firms.
An individual firm’s total cost function is given by TC = 1⁄2 q2 +
450 and its marginal cost MC = q, where q is the quantity supplied
by the firm. Market demand is given by Q = 4000 - 5P, where Q is
the market quantity demanded and P is the market price. In the long
run market equilibrium, how much will each firm produce?

Suppose the market for wheat consists of 500 identical firms,
each with the following total and marginal cost functions:
TC(q) = 90,000 + 0.00001q2
MC(q) = 0.00002q
where q is measured in bushels per year. The market demand for
wheat is Q = 90,000,000 – 20,000,000P
a. Find the market equilibrium price and quantity.
b. Find the profit-maximizing quantity of production for each
firm and the profit at that quantity.

Consider two identical firms (no. 1 and no. 2) that face a
linear market demand curve. Each firm has a marginal cost of zero
and the two firms together face demand:
P = 50 - 0.5Q, where Q = Q1 + Q2.
a. Find the Cournot equilibrium Q and P for each firm. Calculate
the results rounded to the second digit after the decimal point
b. Find the equilibrium Q and P for each firm assuming that the
firms collude...

Suppose there is a perfectly competitive industry in Dubai,
where all the firms are identical. All the firms in the industry
sell their products at 100 AED. The market demand for this product
is given by the equation: (Kindly solve
clearly)
Q = 1000 – 4P
Furthermore, suppose that a
representative firm’s total cost is given by the equation:
TC = 1250 +
2Q2
What is the inverse demand function for this market?
Calculate the MC function?
Calculate the MR...

The long run cost function for each (identical) firm in a
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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...

In a competitive market with identical firms, the inverse demand
function is p = 100 – Q. The supply curve is horizontal at a price
of 70, which implies that each firm has a marginal cost of 70.
However, one firm believes that if it invests 1,000 in research and
development, it can develop a new production process that will
lower its marginal cost form 70 to 20, and that it will be able to
obtain a patent for its...

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

1. Suppose a monopolist faces the demand for its good or service
equal to Q = 130 - P. The firm's total cost TC = Q2 +
10Q + 100 and its marginal cost MC = 2Q + 10. The firm's profit
maximizing output is
2. Suppose a monopolist faces the demand for its good or service
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The market demand function for a good is given by Q = D(p) = 800
− 50p. For each firm that produces the good the total cost function
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cost is MC(Q) = 4 + Q. Assume that firms are price takers.
(a) What is the efficient scale of production and the minimum of
average cost for each firm? Hint: Graph the average cost curve
first.
(b) What...

2. Suppose this market segment was supplied by a competitive
market rather than a single firm with monopoly power. demand
equation is given by P(q) = 10 –q. Its total cost of producing its
output is given by the function TC(q) = (q2/8) + q+ 16, Then the
demand curve would be the market demand curve, and the marginal
cost equation MC(q) = (q/4) + 1. would represent the competitive
market supply curve.
a.If this were a competitive market, what...

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