Suppose that there are 40 firms in a market, each with the following cost function: C(q) = 42 +5q². Suppose the market demand is D(p) = 1 340 - 38p How much profit does each firm make in the short-run equilibrium? Answer is: 8.90 Can you show me how to get this?
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- A firm in a perfectly competitive industry has patented a newprocess for making widgets. The new process lowers the firm’saverage cost, meaning that this firm alone (although still aprice taker) can earn real economic profits in the long run. a. If the market price is $20 per widget and the firm’s marginalcost is given by MC=0.4q , where q is the dailywidget production for the firm, how many widgets willthe firm produce? b. Suppose a government study has found that the firm’snew process is polluting the air and estimates the socialmarginal cost of widget production by this firm to be. If the market price is still $20, what is thesocially optimal level of production for the firm? Whatshould be the rate of a government-imposed excise tax tobring about this optimal level of production? c. Graph your results.1. Emad is a lettuce supplier in a perfectly competitive lettuce market in Kuwait. If the demand for lettuce in Kuwait is given by: Qo = 40,000 – 10,000P, Where Q is the quantity of lettuce boxes and P is the price of a lettuce box. In the short-run, Emad's has the following total cost function for his production of lettuce: TCimad = 0.25Q +Q +3 Assume that Emad is one of 1000 sellers in the Kuwaiti lettuce market with identical costs. Answer the following questions: e. wnat is tne market suppiy tunction in the short-run? 1. What is the short-run equilibrium price and equilibrium quantity in this market? g. Draw a rough sketch of the market demand and supply functions, showing the optimal point and all intersections with the horizontal and vertical axes. h. What is the demand function for Emad's lettuce in the short-run?Suppose that a latte can only be produced by using exactly 1 ounce of espresso (E) and 3 ounces of milk (M). What is the firm's cost function if the price of espresso is 0.50 per ounce and the price of milk is 0.10 per ounce? a. C = 4q b. C = 0.8q c. C = 0.4q d. C = 160q e. C = 80q
- Consider the market for ice cream. Suppose that this market is perfectly competitive. The cost structure of the typical ice cream producer is as follows. Average total cost is equal to 50 1 1 ATC(Q) +;Q, average variable cost is equal to AVC(Q) =÷Q, and marginal cost is equal to 2 MC(Q) = Q. a.) Give a formula for the typical ice cream producer's average fixed cost AFC(Q). What is the typical ice cream producer's total fixed cost?Consider the market for ice cream. Suppose that this market is perfectly competitive. The cost structure of the typical ice cream producer is as follows. Average total cost is equal to 50 1 1 ATC(Q) +÷Q, average variable cost is equal to AVC(Q) =;Q, and marginal cost is equal to 2 MC(Q) = Q. Now, suppose that a new scientific study comes out that shows that soil pollution from rock salt (a key input for making ice cream) is extremely hazardous to human health. In response, the government decides to impose harsh re-zoning restrictions on any land once used for making ice cream. This reduces the market rent for land used to make ice cream, which in turn lowers the opportunity cost of operating an ice cream factory. This reduction in the opportunity cost of capital causes the total fixed cost of ice cream production to fall to 32, but there is no change to variable cost. Give formulas for the typical ice cream producer's new average total cost curve ATC(Q) and marginal cost curve MC(Q).40 - 2P and its total cost 5. A firm's demand function is Q function is defined as TC = 100 + 2Q + 0.25 Q? . Use these two functions to form the firm's profit function and then determine the level of output that yields the profit maximum. What is the level of profit at the optimum level of output?
- Suppose, at a given point in time, Lynn's Licorice Loft sells licorice in a perfectly competitive market and is producing its profit-maximizing level of output. Suppose further that at this level of production Lynn's average total cost of producing licorice is $1.20, her average variable cost is $1.00, and her marginal cost is $1.30. Over time, the number of licorice sellers in the market will....Your firm "We Work Eot U" rents access to shared open office spaces for a price of S540 per year. The market is perfectly competitive as consumers have many of these "We Work" rental companies to choose from. Your firm's total revenue function is written: TR = (540) Q. The total cost function is written: TC = 80,000+ 40Q + 0.5Q? a. To maximize profits, what is the optimal number of office spaces to rent? Show your work. b. How much (in dollars) are total profits at the profit-maximizing output level? Show your work. c. In the long run, assuming no barriers to entry and exit into this industry, what will happen to profits and to the market price?Suppose that the long-run cost function for a perfectly competitive firm in the personal computer business is C(q) = 4g + 2500 for q> 0. How many units does this firm produce in the long-run? What will be the price in the long-run? What is the profit of the firm in the long-run? The firm produces type your answer..... units of output. The price is $ type your answer.... in the long-run. The firm's profit is $ type your answer.... the long-run. in
- Suppose an avocado farm has cost: C = 0.002q3 + 22q + 750 (where q is measured in bushels). Marginal cost is: MC = 0.006q2 + 22. The market price per bushel of avocados is $46. In the short-run, this firm's profit is In the short-run, this firm's profit is enter your response here. (Round your response to the nearest penny.)At what output rate does the firm maximize profit or minimize loss?In competitive markets, there are many small firms with each firm unable to influence the market price. Suppose company ABX operates in the wheat market. The company produces and markets wheats at a Price = $20 per container. The firm’s total costs are given as: TC = 50 +2Q + 3Q2 What is the firm Fixed Cost? Why? Also, use a graph to support your answer
