A firm’s product sells for $2 per unit in a highly competitive
market. The firm produces output using capital (which it rents at
$75 per hour) and labor (which is paid a wage of $15 per hour under
a contract for 20 hours of labor services). Complete the following
table and use the information to answer the questions that
follow.
Table 1
K
L
Q
MP(K)
AP(K)
AP(L)
VMP(K)
0
20
0
1
20
50
2
20
150
3
20...
Firms in the market for soccer balls are selling in a
purely competitive market. A firm in the soccer ball market has an
output of 1,000 balls, which it sells for $9 each. At the output
level of 1,000, the average variable cost is $8, the average total
cost is $11.00, and the marginal cost is $9.
1. What would you expect the firm to do in the short
run? in the long run?
A firm operates in a perfectly competitive market where the
market price is p=$200. The firm’s total cost of production is
given by the following equation: TC(q) = 250 + 10q2 +
20q, where q is the quantity supplied. When this firm maximizes
profit, what is the optimal quantity to produce in the short run
and what will happen in the long run?
a) q=0 (shut-down) both in the long run and in the short run
b) q=9 in the...
This is a firm in a perfectly competitive
market. The selling price is $5.
Fill in the table below and enter the answers to the questions
down below:
1-How many units should be produced?
2- What will be the profit per unit?
3- What will be the total profit?
4- If the price were to drop to $4 how many units should be
produced?
5- What will be the total profits?
6- If the price falls to $1, how many...
Conigan Box Company produces cardboard boxes. The market is
highly competitive, with boxes currently selling for $10 per box.
Conigan's total curves are:
TC = 10 + 4q + q2
where Q is measured in thousand box bundles per year.
a. Calculate Conigan's profit maximizing quantity, q=??? What is
the firm profit? profit=??? (please enter integers, if it's a
negative number, for example, please enter -5)
b. Analyze Conigan's position in terms of the shutdown condition.
Should Conigan operate or...
Total ProductAverage Fixed CostAverage Variable CostAverage Total CostMarginal Cost1$100.00$17.00$117.00$17250.0016.0066.0015333.3315.0048.3313425.0014.2539.2512520.0014.0034.0013616.6714.0030.6714714.2915.7130.0026812.5017.5030.0030911.1119.4430.55351010.0021.6031.6041119.0924.0033.0948128.3326.6735.0056The accompanying table gives cost data for a firm that is
selling in a purely competitive market. If the market price for the
firm's product is $32, the competitive firm will produceA. 8 units at an economic profit of $16.B. 6 units at an economic profit of $7.98.C. 10 units at an economic profit of $4.D. 7 units at an economic profit of $41.50.The accompanying table gives cost data for a firm...
Total ProductAverage Fixed CostAverage Variable CostAverage Total CostMarginal Cost1$100.00$17.00$117.00$17250.0016.0066.0015333.3315.0048.3313425.0014.2539.2512520.0014.0034.0013616.6714.0030.6714714.2915.7130.0026812.5017.5030.0030911.1119.4430.55351010.0021.6031.6041119.0924.0033.0948128.3326.6735.0056The accompanying table gives cost data for a firm that is
selling in a purely competitive market. If the market price for the
firm's product is $13, the competitive firm should produce
Total ProductAverage Fixed CostAverage Variable CostAverage Total CostMarginal Cost1$100.00$17.00$117.00$17250.0016.0066.0015333.3315.0048.3313425.0014.2539.2512520.0014.0034.0013616.6714.0030.6714714.2915.7130.0026812.5017.5030.0030911.1119.4430.55351010.0021.6031.6041119.0924.0033.0948128.3326.6735.0056The accompanying table gives cost data for a firm that is
selling in a purely competitive market. If the market price for the
firm's product is $12, the competitive firm should produceMultiple Choice4 units at an economic profit of $31.75.4 units at a loss of $109.zero units at a loss of $100.8 units at a loss of $48.80.
The Ajax Manufacturing Company is selling in a purely
competitive market. Its output is 100 units, which sell at $4 each.
At this level of output, total cost is $600, total fixed cost is
$100, and marginal cost is $4. The firm should
reduce output to about 80 units.
produce zero units of output.
continue to produce 100 units.
expand its production.
A purely competitive seller should produce (rather than shut
down) in the short run
only if total cost...
The Indian FMCG Market is a highly competitive market
with a large number of national and global players competing on
margins. The stock turnover is high as FMCG products are frequently
consumed and have a short shelf life. The presence of large number
of sellers is highlighted by the fact that the Indian Soap and
Detergent market has 700 companies competing to sell their
products. The major players across the country are ITC Limited,
Procter & Gamble and Hindustan Unilever...