Question

In: Economics

Pauline’s Peaches grows peaches in a competitive market which sell for a price of $20 a...

Pauline’s Peaches grows peaches in a competitive market which sell for a price of $20 a box. The production function for peaches is Q = -1.5 + 4L – 0.125L2. The wage rate is $10 per hour, and the firm incurs fixed costs of $300 per hour.

Use this information to find number of workers (L), output, and profits.

  1. Number of workers __________
  2. Output of boxes of peaches__________.
  3. Profits ___________
  4. The firm should shut down if the wage rises above $___________. They would make losses of $_______.

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

20. Let's say a product was traded in a fully competitive market and the market price...
20. Let's say a product was traded in a fully competitive market and the market price of this product was given at 50. The total cost function C=10+2Q+3Q2 indicating the relationship between the total cost and output of this company was given. Find the profit maximization output and profit margin.
A firm operates in a perfectively competitive industry. Given the market price of 20 and the...
A firm operates in a perfectively competitive industry. Given the market price of 20 and the firm’s marginal cost function MC=-8+2Q. In addition, the average variable cost is equal to the marginal cost at 15 units of output. Use the information to answer questions 14 and 15. Which of the following units of output would be chosen by the firm? 10 units 14 units 22 units 32 units Should the firm continue its business and why? Yes, because the market...
A firm operates in a perfectively competitive industry. Given the market price of 20 and the...
A firm operates in a perfectively competitive industry. Given the market price of 20 and the firm’s marginal cost function MC=-8+2Q. In addition, the average variable cost is equal to the marginal cost at 15 units of output. Use the information to answer questions 14 and 15. Which of the following units of output would be chosen by the firm? 10 units 14 units 22 units 32 units Should the firm continue its business and why? Yes, because the market...
A perfectly competitive market does not imply which of the following? a. The market price is...
A perfectly competitive market does not imply which of the following? a. The market price is established at the point where supply equals demand. b. Marginal benefit equals marginal cost. c. The firm’s price will be greater than marginal revenue. d. Production is carried out only until supply equals demand. Which of the following is not a point where firms produce in long-run equilibrium? a. Marginal cost equals marginal revenue. b. Price is greater than marginal cost. c. The minimum...
A firm in a perfectly competitive market will produce no output in the short run if the price is below $20 but will produce if the price is above $20.
A firm in a perfectly competitive market will produce no output in the short run if the price is below $20 but will produce if the price is above $20. The smallest quantity they will produce in the short run is 6. Firms will earn 0 economic profit if the price is $447.5 and its profit maximizing quantity is 21 at that price. The firm’s fixed cost is $6615. Assume the good can be produced in continuous quantities.Draw a picture...
The nation of Ectenia has 20 competitive apple orchards, all of which sell apples at the...
The nation of Ectenia has 20 competitive apple orchards, all of which sell apples at the world price of $2 per apple. The following equations describe the production function and the marginal product of labor in each orchard: Q = 100L − L^2 MP L = 100 − 2L, where Q is the number of apples produced in a day, L is the number of workers, and MP L is the marginal product of labor. (a) What is each orchard's...
a) Initially, the market price was p=20, and the competitive firm’s minimum average variable cost was...
a) Initially, the market price was p=20, and the competitive firm’s minimum average variable cost was 18, while its minimum average cost was 21. Should it shut down? Why? Now this firm’s average variable cost increases by 3 at every quantity, while other firms in the market are unaffected. What happens to its average cost? Should this firm shut down? Why? b) Suppose that the demand curve for wheat is Q=100−10p and the supply curve is Q=10p. The government imposes...
Which of the following statements are true about a competitive price-searcher market? Firms are not price...
Which of the following statements are true about a competitive price-searcher market? Firms are not price takers. Price equals average total cost in the long run. Firms earn positive profit in the long run. Firms are price takers.
The equilibrium price of a product which is sold in a free, open and competitive market...
The equilibrium price of a product which is sold in a free, open and competitive market is determined by the market demand and the market supply of the product. However, sometimes the current market price of the product is not at its equilibrium level. - Explain how and why the equilibrium price of the product will be reached. - Provide a simple numerical example and draw a graph in order to support your explanation.
In a perfectly competitive market structure, a competitive firm has the given price as a price...
In a perfectly competitive market structure, a competitive firm has the given price as a price taker and, therefore, its price is equal to its MR shown on the same demand curve as the perfectly elastic demand curve. On the other hand, a monopoly firm has a downward sloping demand curve and its equilibrium price is always larger than MR (P>MR). Briefly explain why? Use both equation and diagram.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT