5. In a certain market in the long-run, suppose the total cost function for each firm...

5. In a certain market in the long-run, suppose the total cost function for each firm and potential entrant is given by TC = 5Q³ -10Q².+20Q. Market demand is given by D(P)= 2000 - 100P .

1) In equilibrium, how many units will each firm produce?

2) What is the market equilibrium price?

3) What is total market demand?

4) What is the equilibrium number of firms in the long-run?

Expert Solution

Rahul Sunny answered 2 years ago

There are 10 firms in this market. Each firm has the following long-run cost function:

There are 10 firms in this market. Each firm has the following long-run cost function: TC = 200 + 0.5q^2 Market demand for paper is given by Qd=300-5p Suppose we are in the long run, so both labor and capital are variable.a) What is the long-run market price?b) How many firms will be in this market in the long run?c) What is each firm’s producer surplus in the long run?

Suppose in the short run a perfectly competitive firm has the total cost function: TC(Q)=675 +...

Suppose in the short run a perfectly competitive firm has the total cost function: TC(Q)=675 + 3q2 where q is the firm's quantity of output. If the market price is P=240, how much profit will this firm earn if it maximizes its profit? b) how much profit will this firm make? c) Given your answer to b), what will happen to the market price as we move from the short run to the long run? d) What is the break-even...

Consider a representative firm in the perfectly competitive market. This firm has the following total long-run...

Consider a representative firm in the perfectly competitive market. This firm has the following total long-run cost function (C): C = 2q^2 + 8 where q is the output quantity produced by the firm. Suppose further that the market demand is given as: QD = 130-P where QD is the quantity demanded in the market and P is the output price. Find the long-run market equilibrium price and the number of firms in the market.

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...

A perfectly competitive firm has the following (short-run) total cost function: ??(?)=?2+200 and the market demand...

A perfectly competitive firm has the following (short-run) total cost function: ??(?)=?2+200 and the market demand for the firm’s output is given by ??(?)=300−6?. What is the equilibrium price and how much output will be produced by each firm in the long run? Suppose that the market demand curve now becomes ??(?)=150−6? . In the long run, with this reduced demand, what will be the equilibrium market price and quantity and how many firms will be serving the market and...

Suppose that there are 5 hamburger stands each with identical short-run total cost curves described as: ...

Suppose that there are 5 hamburger stands each with identical short-run total cost curves described as: SRTC=16+(Q2/100) where Q is the number of hamburgers each stand produces per day. If the daily market demand for this perfectly competitive market is Qd=900-200P, how much profit will each stand make per day (if any)?

Suppose that the widget industry is perfectly competitive. Each producer has the long-run average cost function:...

Suppose that the widget industry is perfectly competitive. Each producer has the long-run average cost function: AC(Q)=40-6Q+1/2Q2. The market demand curve for widgets is given by: D(P)=2200-100P. What is the long-run equilibrium price in this industry, at this price how much would and individual firm produce and how many active producers are there in the long-run competitive equilibrium?

1. Is this cost function a short-run or long-run cost function? ? = 1 3 ?...

1. Is this cost function a short-run or long-run cost function? ? = 1 3 ? 3 − ? 2 + 2? + 90 a. Short-run b. Long-run c. There is information to answer question _____ 2. The ______illustrates the various combinations of L and K that can produce the same level of output. a. Isoquant b. Isocost c. Expansion path _____ 3. For a cost-minimizing firm that chooses the optimal level of L and K, it will always choose...

14. Each firm belonging to a competitive industry has the following long-run cost function C(q) =...

14. Each firm belonging to a competitive industry has the following long-run cost function C(q) = 10q − 2q^2 + q^3 where q denotes the output of a representative firm. Firms can enter and exit the industry freely. The industry has constant costs: input prices do not change as industry output changes. The market demand facing the industry is given by Q = 20 − P (a) Derive the long-run industry supply curve. [5 marks] (b) How many firms operate...

Use the following long run total cost (LTC) function to answerthe question that follows, :...

Use the following long run total cost (LTC) function to answer the question that follows, : LTC=Q^3-100Q^2+2550Qa. What levels of output will this firm experience economies of scale? i. Q<b. What levels of output will this firm experience diseconomies of scale?ii. Q>

Question