Question
In: Economics
Suppose that the perfectly competitive market for coffee beans is made up of identical firms with...
Suppose that the perfectly competitive market for coffee beans is made up of identical firms with long-run total cost functions given by T C = 2Q 3 − 24Q 2 + 80Q , where Q is 100,000 pounds of coffee beans. Assume that these cost functions are independent of the number of firms in the market and that firms may enter or exit the market freely. Market demand is Q = 100, 000 − 400P
(a) Find the long-run equilibrium price, the quantity produced by each firm, and the number of firms in the industry.
(b) Suppose that market demand increases to Q = 140, 000 − 400P , Solve for the new long-run competitive equilibrium and the number of firms in the industry under the new market demand condition.
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
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 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 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....
Assume the market for coffee mugs is perfectly competitive. Firms in the market are producing output,...
Assume the market for coffee mugs is perfectly competitive.
Firms in the market are producing output, but are currently making
economic losses.
a. How does the price of coffee mugs compare to the average
total cost, the average variable cost, and the marginal cost of
producing coffee mugs?
b. Draw two graphs, side by side, illustrating the present
situation for the typical firm and in the market.
c. Assuming there is no change in either market demand or the
firms’...
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 all firms in a perfectly competitive market are in long-run equilibrium. Illustrate what a perfectly...
Suppose all firms in a perfectly competitive market are
in long-run equilibrium. Illustrate what a perfectly competitive
firm will do if market demand rises.
Assume the market for coffee mugs is perfectly competitive. Firms in the market are producing output, but are currently making economic losses.
Assume the market for coffee mugs is perfectly competitive.
Firms in the market are producing output, but are currently making
economic losses.How does the price of coffee mugs compare to the average total
cost, the average variable cost, and the marginal cost of producing
coffee mugs?Draw two graphs, side by side, illustrating the present
situation for the typical firm and in the market.Assuming there is no change in either market demand or the
firms’ cost curves,explain what will happen in...
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