Question
In: Advanced Math
A firm faces the demand schedule as ? = 660 − 3? and the total cost...
A firm faces the demand schedule as ? = 660 − 3?
and the total cost schedule as
?? = 6?^3 − 72?^2 + 240? + 25. Please answer the followings:
a. Does the above cost function satisfy the parametric restrictions
we derived in the class?
b. What is the maximum profit the firm can make? Confirm your
results with second order
conditions as well.
Solutions
Colby Messinger answered 2 years agoRelated Solutions
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...
2. Consider the following hourly demand and cost schedule for a monopoly firm; (Tπ, is Total...
2. Consider the following hourly demand and cost
schedule for a monopoly firm;
(Tπ, is Total
Profit).
Q P TR MR TC TVC MC ATC AVC Tπ
0 19 $4.00
1 18 4
2 17 2
3 16 1
4 15 2
5 14 3
6 13 4
7 12 5
8 11 6
9 10 7 ___________________________
Monopolistic firm faces the inverse demand function p = 250 – 6Q. Firm’s total cost of...
Monopolistic firm faces the inverse demand function p = 250 –
6Q. Firm’s total cost of production is C = 1250 + 10Q +
8Q2 :
1. Create a spreadsheet for Q = 1 to Q
= 20 in increments of 1. Determine the profit-maximizing output and
price for the firm and the consequent level of profit.
2. Will the firm continue the
production at the profit-maximizing level of output? Show why or
why not?
3. Calculate the Lerner Index...
Monopolistic firm faces the inverse demand function p = 250 – 6Q. Firm’s total cost of...
Monopolistic firm faces the inverse demand function p = 250 –
6Q. Firm’s total cost of production is C = 1250 + 10Q +
8Q2 :
1. Create a spreadsheet for Q = 1 to Q
= 20 in increments of 1. Determine the profit-maximizing output and
price for the firm and the consequent level of profit.
2. Will the firm continue the
production at the profit-maximizing level of output? Show why or
why not?
3. Calculate the Lerner Index...
Monopolistic firm faces the inverse demand function p = 250 – 6Q. Firm’s total cost of...
Monopolistic firm faces the inverse demand function p = 250 –
6Q. Firm’s total cost of production is C = 1250 + 10Q +
8Q2 :
1. Create a spreadsheet for Q = 1 to Q
= 20 in increments of 1. Determine the profit-maximizing output and
price for the firm and the consequent level of profit.
2. Will the firm continue the
production at the profit-maximizing level of output? Show why or
why not?
3. Calculate the Lerner Index...
Given the following total cost schedule of a firm, derive the total fixed cost and total...
Given the following total cost schedule of a firm, derive the
total fixed cost and total variable cost schedules of the firm, and
from them derive the average fixed cost, average variable cost,
average total cost, and marginal cost schedules of the firm.
Q1. Answer question above using the table below:
Quantity TC($) TFC TVC AFC AVC ATC MC
0
1
2
3
4
5
Q 0 1 2 3 4 5
TC $30 50 60 81 118 180
Assume a firm faces the following demand and cost functions: Demand is: Q = 2600 –...
Assume a firm faces the following demand and cost functions:
Demand is: Q = 2600 – 100P + 0.2M – 500Pr ; AVC = 20 – 0.07Q +
0.0001Q^2; M = $20,000; Pr = $2; Should the firm shut down in the
short-run? What are the expected profits if fixed costs are
$22,500?
A competitive firm faces a market price of $15. The firm has a total cost function...
A competitive firm faces a market price of $15. The firm has a
total cost function equal to TC(q) = 30 + 5q + q2 . What quantity
does the firm produce? What are its profits? Will the firm shut
down in the short run? Explain.
A monopolist faces a single market with the following demand curve and total cost P =...
A monopolist faces a single market with the following demand
curve and total cost
P = 180 – 2.5Q and TC = 2Q2
i. Determine the quantity of output that it should produce and
the price it should charge to maximize profit. Then, calculate the
profit.
when a firm faces a market price that is between the minimums of average total cost...
when a firm faces a market price that is between the minimums of
average total cost and average variable cost, which of the
strategies should it choose?
a. continue to produce and sell output because it will maximize
its economic profit
b. produce nothing and shut down the business
c. produce nothing and keep the business
d. continue to produce and sell output because it will minimize
its economic loss
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