Question
In: Economics
Suppose there is a perfectly competitive industry where all the firms are identical with identical cost...
Suppose there is a perfectly competitive industry where all the firms are identical with identical cost curves.
Furthermore, suppose that a representative firm’s total revenue is given by the equation TR = q.p; where q is the quantity of output produced by the firm and p the market price (=P).
The market demand for this product is given by the equation P = 5000 – 9Q where Q is the market quantity.
In addition you are told that the market supply curve is given by the equation P = 1000 + Q.
a. What is the equilibrium quantity and price in this market given this information?
b. The firm’s MC equation based upon its TC equation is MC = 5q + 4. Given this information and your answer in part (a), what is the firm’s profit maximizing level of production, total revenue, total cost and profit at this market equilibrium?
Is this a short-run or long-run equilibrium? Explain your answer.
c. Given your answer in part (b), what do you anticipate will happen in this market in the long-run?
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Suppose there is a perfectly competitive industry where all the firms are identical with identical cost...
Suppose there is a perfectly competitive industry where all the
firms are identical with identical cost curves.
Furthermore, suppose that a representative firm’s total cost is
given by the equation TC = 120 + q2 + 2q where q is the
quantity of output produced by the firm.
You also know that the market demand for this product is given
by the equation P = 1200 – 2Q where Q is the market quantity. In
addition you are told that...
Suppose there is a perfectly competitive industry where all the firms are identical with identical cost...
Suppose there is a perfectly competitive industry where all the
firms are identical with identical cost curves.
Furthermore, suppose that a representative firm’s total revenue
is given by the equation TR = q.p; where q is the quantity of
output produced by the firm and p the market price (=P).
The market demand for this product is given by the equation P =
5000 – 9Q where Q is the market quantity.
In addition you are told that the market...
Suppose there is a perfectly competitive industry where all the firms are identical with identical cost...
Suppose there is a perfectly competitive industry where all the
firms are identical with identical cost curves. Furthermore,
suppose that a representative firm’s total cost is given by the
equation. TC = 100 + q^2 + q where q is the quantity of output
produced by the firm. You also know that the market demand for this
product is given by the equation P = 1000 - 2Q where Q is the
market quantity. In addition, you are told that...
Suppose there is a perfectly competitive industry where all the firms are identical with identical cost...
Suppose there is a perfectly competitive industry where all the
firms are identical with
identical cost curves. Furthermore, suppose that a
representative firm’s total cost is given by the equation
where is the quantity of output produced by the firm. You also
know that the TC=200 +q^2+q where q is the quantity of output
produced by the firm. You also know that the market demand for this
product given by the equation P= 1000-2Q where Q is the market
quantity....
Suppose there is a perfectly competitive industry in Dubai, where all the firms are identical. All...
Suppose there is a perfectly competitive industry in Dubai,
where all the firms are identical. All the firms in the industry
sell their products at 20 AED. The market demand for this product
is given by the equation: (Total marks = 5)
Q = 25 – 0.25P
Furthermore, suppose that a
representative firm’s total cost is given by the equation:
TC = 50 +4Q +
2Q2
What is the inverse demand function for this market?
Calculate the MC function?
Calculate...
Suppose corn producers are in a perfectly competitive industry where all the firms are identicj with...
Suppose corn producers are in a perfectly competitive industry
where all the firms are identicj with identical cost curves. In
this industry the market price for a bushel of corn is $400.
Suppose that a representative firm’s total cost is given by the
equation TC=500 + q2 + 200q where q is the quantity of output
produced by an individual firm. The firms MC curve equation based
upon its TC curve equation is MC =2q + 200. Given this information...
The industry for hockey pucks is perfectly competitive. All firms are identical with a coststructure that...
The industry for hockey pucks is perfectly competitive. All
firms are identical with a coststructure that is independent of the
number of firms in the industry. Each firm has a long-run average
cost curve that has its minimum of $2.00 at a quantity of 2500
pucks. The demand for pucks is given by Q = 1,400,000 - 400,000P.
a) Find long-run equilibrium price and output in the hockey puck
market. b) What is the long-run equilibrium production of each
firm?...
Let a perfectly competitive industry have 100 identical firms with a marginal cost curve given by...
Let a perfectly competitive industry have 100 identical firms
with a marginal cost curve given by MC = Q/2.
a. Construct the short run industry supply curve with 100
firms.
b. Let the market demand curve be Q = 4000 – 200*P. Find the
short run equilibrium price, industry quantity, and firm
quantity.
c. This is a constant cost industry with a cost of $8. Will
firms be making profits or losses in the short run equilibrium in
b?
d....
Suppose a perfectly competitive market consists of identical firms with the same cost function given by...
Suppose a perfectly competitive market consists of identical
firms with the same cost function given by
C(q)=2q3 - 3q2 + 70q
The market demand is
QD= 2200 - 10p
What will be the long-run equilibrium price in this market?
Round your answer to the nearest cent (0.01)
Suppose in Pakistan, all the firms are identical with identical cost curves which mean industry is...
Suppose in Pakistan, all the firms are identical with identical
cost curves which mean
industry is perfectly competitive. Now please consider this
following information about the
industry: A representative firm’s total cost is given by the
equation TC = 100 + q2 + q where
q is the quantity of output produced by the firm. You also know
that the market demand for
this product is given by the equation P = 1000 – 2Q where Q is the
market...
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