Consider the following “Total Cost” function:

Total Cost = 4Q³ – 204Q² + 700Q + 2500

a.) Solve for the “inflection point” of this function ( show your work).

b.) Which Q has the LOWEST “Marginal Cost” ( give a numerical answer; briefly

explain how your answer to a.) is relevant).

Expert Solution

Rahul Sunny answered 2 years ago

Consider a firm with the following total cost function: TC = 50 + 6Q + 4Q2 . The marginal cost associated with the given cost function is MC = 6 + 8Q.

Consider a firm with the following total cost function: TC = 50 + 6Q + 4Q2 . The marginal cost associated with the given cost function is MC = 6 + 8Q. Assume the firm is operating in the short-run.A) What are the firm’s fixed costs? What are the firm’s variable costs?B) Calculate average fixed costs, average variable costs, and average total costs.C) Suppose the firm is in a competitive market and is a price taker. Suppose the equilibrium price...

Consider a firm whose total cost function is q3 – 6q2 + 13q. If the price...

Consider a firm whose total cost function is q3 – 6q2 + 13q. If the price of a unit of output is $13, what is the profit-maximizing value of q? Find the average cost function of the firm? What is the firm’s minimum average cost? What is the equilibrium price of output? How much does each firm produce at equilibrium price? What is each firm’s profit at the equilibrium price?

Consider a monopoly that faces a demand curve and short run total cost function of: P=...

Consider a monopoly that faces a demand curve and short run total cost function of: P= 270-2Q TC= 4700+1/4Q2 A. Find the profit-maximizing quantity for this monopolist. B. How much profit will the firm make? C. Represent this situation graphically, pointing out all the features, including cost curves. D. How much is the deadweight loss caused by the monopolist?

Consider a monopolist whose total cost function is TC = Q3 – 30Q2 + 301Q, whose...

Consider a monopolist whose total cost function is TC = Q3 – 30Q2 + 301Q, whose inverse demand function is P = 1501 – 30Q where Q is output and P is the price. If the firm were to act as a single price monopolist, how much will it produce? What price it will charge? How large will be its profit? Calculate the firm’s Lerner Index of monopoly power. Now suppose this firm can practice perfect price discrimination. How much...

Consider a fishery characterized by the following total cost (TC) and total revenue (TR) curves as...

Consider a fishery characterized by the following total cost (TC) and total revenue (TR) curves as a function of total effort (E): TC = 12E and TR = 32E – E 2 , Differentiating these functions yields the marginal cost (MC) and marginal revenue (MR) curves: MC = 12 and MR = 32 – 2E. a. Draw a graph depicting total costs and total revenues as a function of effort in the fishery. At what effort level are total revenues...

Consider total cost and total revenue, given in the following table: In the final column, enter...

Consider total cost and total revenue, given in the following table: In the final column, enter profit for each quantity. (Note: If the firm suffers a loss, enter a negative number in the appropriate cell.) Problems and Applications Q4 Ball Bearings, Inc., faces costs of production as follows: Quantity Total Fixed Costs Total Variable Costs (Dollars) (Dollars) 0 100 0 1 100 50 2 100 70 3 100 90 4 100 140 5 100 200 6 100 360 Complete the...

Consider a monopolist who has a total cost function C(q) = 1000 + 10q The demand...

Consider a monopolist who has a total cost function C(q) = 1000 + 10q The demand function for the market is D(p) = 600 - 12.5p Answer each part below:(a) Use the inverse demand equation to derive the monopolist's marginal revenue equation, MR(q). (1 points) (b) What is the marginal cost, MC(q)? (0.5 points) (c) Solve for the profit-maximizing quantity and price. Note: Explain or show your work! (2 points) (d) Compute the price elasticity of demand at the profit-maximizing...

A monopolist has the following total cost function: C = 50 + 10Q + 0.5Q2 They...

A monopolist has the following total cost function: C = 50 + 10Q + 0.5Q2 They face the market demand: P = 210 – 2Q a. What is the profit-maximizing price and quantity set by this monopoly? What is this monopolist’s profit? b. Calculate the producer surplus, consumer surplus, and deadweight loss. c. If the price elasticity of demand (ԑ) faced by this monopolist at the equilibrium is –1.625, what is the Lerner Index? d. If the price elasticity of...

Consider a perfectly competitive market in which each firm's short-run total cost function is C =...

Consider a perfectly competitive market in which each firm's short-run total cost function is C = 64 + 6q + q2, where q is the number of units of output produced. The associated marginal cost curve is MC = 6+ 2q. In the short run each firm is willing to supply a positive amount of output at any price above ___. If the market price is $30 each firm will produce ____ units in the short-run. Each firm earns a...

Consider a perfectly competitive market where each firm’s total cost function is TC = q^3 –...

Consider a perfectly competitive market where each firm’s total cost function is TC = q^3 – 10q^2 + 50q. a) What is the long run equilibrium price and quantity for each firm? b) The industry demand function is Qd=2000-10p. How many firms are there in the industry in the long run? c) The demand has changed to Qd=4000-18p. Describe the industry’s response to the demand shock and calculate the change in the number of firms in the long run equilibrium.

Question