Question
In: Economics
Suppose a competitive industry faces an increase in demand. Illustrate the series of developments through which...
Suppose a competitive industry faces an increase in demand. Illustrate the series of developments through which a competitive market achieves a larger level of output than before.
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Suppose a competitive industry faces a decrease in demand (i.e. the demand curve shifts to the...
Suppose a competitive industry faces a decrease in demand (i.e.
the demand curve shifts to the left). What are the steps, in the
short-run and then in the longrun, in which a competitive market
ensures increased output?
15. A typical firm in a monopolistically competitive industry faces the following demand and total cost...
15. A typical firm in a monopolistically competitive industry
faces the following demand and total cost equations for its product
Q= 20- 1/3 P TC= 100-5Q+ Q2 a. What is the firm’s short-run
profit-maximizing price and output level? b. What is the firm’s
economic profit? c. Suppose that the existence of economic profit
attracts new firms into the industry such that the new demand curve
facing the typical firm in this industry is Q=35/3 - P/3. Assuming
no change in...
A perfectly competitive industry faces a demand curve given by QD= 2515 – 2P. The long-run...
A perfectly competitive industry faces a demand curve given by
QD= 2515 – 2P. The long-run total cost curve of each
firm is given by LTC = 10q -.2q2+.004q3.
Derive the long-run equilibrium values of output per firm, market
output, price, and the number of firms.
You are told that in long-run perfectly competitive equilibrium
each firm produces 25 units and that the marginal cost at that
level of output is $10. Solve for the long-run equilibrium values
of market...
In a perfectly competitive industry, an increase in demand has the following effect on equiliobrium product...
In a perfectly competitive industry, an increase in demand has
the following effect on equiliobrium product price:
a)The increase in demand causes a shift upward in supply as more
people want a product in short supply.
b)The increase in demand will cause price to decrease. The lower
price will encourage additional consumers to buy the product,
causing price to rise.
c)The increase in demand causes price to increase initially.
With price above short-run minimum average cost, firms will make an...
2. Consider a competitive industry in which the market demand for the product is expressed as:...
2. Consider a competitive industry in which the market demand
for the product is expressed as: P = 164 - 0.0002Q, and the
industry supply of the product is expressed as:
P = 4 + 0:0003Q. The typical firm in this market has a marginal
cost of MC = 4 + 1.2q
(a) Determine the equilibrium market price and output. Calculate
the consumer surplus and the producer surplus at equilibrium in the
industry.
(b) Determine the output of a typical...
Assume a firm in a monopolistically competitive market faces a demand curve which includes the following points:
Assume a firm in a monopolistically competitive market faces a
demand curve which includes the following points:Price 12
11 10 9 8
7 6 5 Quantity 2 3
4 5 6
7 8 9 If a profit-maximizing firm chose to produce 6 units of the
good, what is the marginal cost of the 6th unit?8635
A firm in a perfectly competitive industry faces the following cost and revenue conditions: ATC =...
A firm in a perfectly competitive industry faces the following
cost and revenue conditions: ATC = $6; AVC = $3; MR = MC = $5. The
firm is
Suppose that a firm in a competitive market faces the following revenues and costs:
Table 14-9Suppose that a firm in a competitive market faces the following
revenues and costs:QuantityTotal RevenueTotal Cost0$0$101$9$142$18$193$27$254$36$325$45$406$54$497$63$598$72$709$81$82Refer to Table 14-9. If the firm produces 4 units
of output,a)marginal revenue is less than marginal cost.b)marginal cost is $4.c)the firm is maximizing profit.d)total revenue is greater than variable cost.
Suppose that a firm in a competitive market faces the following revenues and costs:
Suppose that a firm in a competitive market faces the following
revenues and costs:QuantityTotal RevenueTotal Cost0$0$31$7$52$14$83$21$124$28$175$35$236$42$307$49$38A. A competitive firm won’t produce beyond what quantity?
Why?B. What is the marginal cost of the 5th unit?C. How much should the competitive firm produce to maximize
profit?D. What is the profit at the maximizing quantity?
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand...
Consider a competitive
industry and a price-taking firm that produces in that industry.
The market demand and supply functions are estimated to be:
Demand:
Qd= 10,000 - 10,000P +
1.0M
Supply:
Qs= 80,000 + 10,000P -
4,000P1
where Q is
quantity, P is the price of the product, M is
income, and P1 is the input price. The
manager of the perfectly competitive firm uses time-series data to
obtain the following forecasted values of M and
P1 for 2015:
M̂...
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