Suppose market QD = 90 – 15P and market QS = 6P – 204 and the...

Suppose market QD = 90 – 15P and market QS = 6P – 204 and the representative firm’s total cost is TC = 4 + 3q + 0.1q2 and its marginal cost is MC = 3 + 0.2q.

a.What is market equilibrium price? Show your work.

b.What is the firm’s profit maximizing level of output at this price? Assume this is a perfectly competitive industry.

c.What is the firm’s profit?

d.If these same market conditions persist, would there likely be entry into this industry, exit from the industry, or no change in the long run? Explain briefly.

Expert Solution

Rahul Sunny answered 9 months ago

Suppose that the market demand and supply for milk is given by Qd =120−6P and Qs...

Suppose that the market demand and supply for milk is given by Qd =120−6P and Qs = 12P − 60 a. Find the market equilibrium quantity, and the equilibrium price. (5 points) b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus (or shortage) if a price floor of $8 is imposed in this market. (5 points) c. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus (or shortage) if a price...

QD = 90 - 15P QS = 10P - 10 Graph the demand curve, labeling the...

QD = 90 - 15P QS = 10P - 10 Graph the demand curve, labeling the price and quantity intercepts. What is the value of the price (vertical) intercept? (Hint: What is P if QD = 0?) a. What is the value of the quantity (horizontal) intercept of the demand curve? (Hint: What is QD if P = 0?) b. What is the quantity demanded at a price of $2.00 per unit? c. Identify the area of consumer surplus on...

Demand: Qd=90-4P, where Qd is quantity demanded and P is price Supply: Qs=-100+15P, where Qs is...

Demand: Qd=90-4P, where Qd is quantity demanded and P is price Supply: Qs=-100+15P, where Qs is quantity supplied and P is price Recall that equilibrium price was 19, while quantity was 50. At that price, the price elasticity of demand was -0.80. Now I want you to rearrange each equation, putting P on the left-hand side, and solve again for equilibrium P and Q (you ought to get the same answer). Now we want to figure the monopoly price. Take...

Market demand is given as QD = 300 – 6P. Market supply is given as QS...

Market demand is given as QD = 300 – 6P. Market supply is given as QS = 4P. Each identical firm has MC = 6Q and ATC = 3Q. What is a firm’s profit? Show your work

Qd = 72 − 12P Qs = -18 + 6P 1) If price elasticity of demand...

Qd = 72 − 12P Qs = -18 + 6P 1) If price elasticity of demand for avocado at price P* is equal to -6/9, how much is P*? a) $2.00 b) $2.20 c) $2.40 d) $2.60 e) $2.80 2) What is quantity demanded at price P* at which price elasticity of demand for avocado equals -6/9? a) 42.2 tons b) 43.2 tons c) 44.2 tons d) 45.2 tons e) 46.2 tons 3) If price elasticity of supply for avocado...

1. Suppose the market demand for rutabagas is QD = 10 - 0.25P and the QS...

1. Suppose the market demand for rutabagas is QD = 10 - 0.25P and the QS = 0.15P, where P is the price per box of rutabagas and Q measures the quantity of boxes. What is the equilibrium price of rutabagas? 2. Suppose the market demand for rutabagas is QD = 10 - 0.25P and the QS = 0.15P, where P is the price per box of rutabagas and Q measures the quantity of boxes. What is the equilibrium quantity...

Suppose the market demand is QD = 200−P and market supply is QS = 4P−100. A....

Suppose the market demand is QD = 200−P and market supply is QS = 4P−100. A. Suppose the government imposes a tax of t = 5 on producers. What is the incidence of the tax on consumers? Producers? B. What is the deadweight loss of the tax?

4. Suppose the market demand and supply functions are QD = 180 – 1.5P and QS...

4. Suppose the market demand and supply functions are QD = 180 – 1.5P and QS = 3.5P + 40. You have just graduated and moved to this city; as a new MBA and an entrepreneur, you are considering entering the market for this product. a. Determine the equilibrium price and quantity in this market. b. You’ve researched and found that most firms in the market currently experience costs such that TC = 15 + 45Q – 10Q2 + 1.5Q3....

Suppose a market is characterized by the following: QD = 1,500-3P QS = -500+2P A) Determine...

Suppose a market is characterized by the following: QD = 1,500-3P QS = -500+2P A) Determine the equilibrium price and quantity . B) Graph the equilibrium price and quantity in part A) C) Suppose the government imposes a per-unit tax of 5 (ie. 5 dollars in tax on every unit purchased) on buyers. Solve for the new equilibrium price and quantity. HINT: There are two prices and one quantity to solve for. . D) Determine the total amount of tax...

Suppose market demand and supply are given by Qd= 400-12P and Qs= -20 + 8P. If...

Suppose market demand and supply are given by Qd= 400-12P and Qs= -20 + 8P. If a price floor of $20.00 is imposed, there will be a surplus of 10 units. there will be neither a surplus or shortage. there will be a shortage of 16 units. None of the above choices makes any sense in this case.

Question