Question

The total cost function for each firm in a perfectly competitive industry is TC(y)=100+8y^2 . Market demand is q=2000-(market price) .

Find: the long run equilibrium firm quantity (y), market quantity (q), amount of firms, and price.

Answer #1

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...

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...

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...

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...

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...

A firm operates in perfectly competitive markets with the
following demand and cost functions:
TC=0.5Q2+100Q+50 Q=1000-4P
a) What is the long-run equilibrium
price and quantity in the
market?
b) How many firms are there in the industry in the long-run?

A perfectly competitive firm’s total cost function is given
by: TC = 400+4Q^2 . The minimum point of average total cost (ATC)
is reached at Q=10. You also know that the market demand function
for this product is: QD=100-P. How many firms are in the market in
the long-run? (Hint: first you need to find the price in the
long-run)
Select one:
a. N=6
b. N=4
c. N=2
d. None of the above

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?

Q3) Assume that the manufacturing of cellular phones is a
perfectly competitive industry. The market demand for cellular
phones is described by a linear demand function:
QD=(6000-50P)/9. There are 50 manufacturers of cellular
phones. Each manufacturer has the same production costs. These are
described by long-run total cost functions of TC(q) = 100
+ q2 + 10q.
1) Show that a firm in this industry maximizes profit by
producing q = (P-10)/2
2)Derive the industry supply curve and show that...

8. Suppose that there are 100 identical firms in a perfectly
competitive industry. Each firm has a short-run total cost curve of
the form C(q) = 1/300q3 +0.2q2 + 4q + 10
(d) A perfectly competitive market has 1,000 firms. In the very
short
run, each of the firms has a fixed supply of 100 units. The
market
demand is given by
Q = 160, 000 - 10,000P
(e) Calculate the equilibrium price in the very short run.
(f) Calculate...

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