A competitive market has demand of Q = 50 - 0.5P and total cost of production is C=70q for each firm. What is the effect of an innovation by one firm that gives a marginal cost of $28? a. This is a drastic innovation that causes the market quantity to be 18. b. This is a drastic innovation that causes the market quantity to be 36. c. This is a drastic innovation that causes the market quantity d. This is a non-drastic innovation that causes the market quantity to be 18.
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- A perfectly competitive industry is in long-run equilibrium. Each of the identical firms has a long- run cost function C = 100 + q². As a result, a firm's marginal cost function is MC = 2q. In the long-run competitive equilibrium, (a) How much does the firm produce? (b) What is the equilibrium price? (c) If the market quantity demanded at the equilibrium price is Q = 2500, how many firms are in the market?How many would a competitive firm produce if the market price is 11?The market for paperback detective novels is perfectly competitive. Market Demand is given by Q=450-6P. Market Supply is given by Q=4P-13. Suppose 21 units are bought to the market. Consider the Marginal Cost of production for these 21 units. What is the maximum Marginal Cost of production of these 21 units? Enter a number only, do not include the $ sign. Hint: 21 doesn't have to be the market quantity.
- The graph on the right shows cost curves for a perfectly competitive firm. Firm's Supply Curve Use the point drawing tool to identify price-quantity combinations for the prices of $20, $30, $50, and $80 per unit of output. 120- MC 110- Carefully follow the instructions above, and only draw the required objects. 100- AC 90- If there are 100 identical firms in the market, what will be the market supply (to the 80- nearest 100) at these prices? 70- AVC Price Market Supply 2 60- $20 9 50- $30 40- $50 30 20- $80 10- 0- 100 120 140 160 180 Output 20 40 60 80 étv 20 MacBook Air DII 80 F9 F5 F3 F2 #3 $ & 3 4 5 6 9 { E R Y P F G H J K > C V N M command op レレ .... P. AC, AVC, MC B トIn a perfectly competitive market demand function of a good is Q" = -30P+ 2250 and supply function is Q° = 20P. Firms that are active in this market have an identical cost function of 0* – 6Q² + 30Q Calculate the short run market price and short run profit of each firms. b. How many firms are active in market in short run? c. What will be the long run price in market? d. How many firms are active in market in long run? a.Will a profit-maximizing firm in a competitive market ever produce a positive level of output in the range where the marginal cost is falling? Give an explanation.
- Each of the 8 firms in a competitive market has a cost function of C= 5+q?. The market demand function is Q = 120 - p. Determine the equilibrium price, quantity per firm, and market quantity. The equilibrium price is $ (Enter your response as a whole number.) The quantity per firm is q= units. (Enter your response as a whole number.) The market quantity is Q = units. (Enter your response as a whole number.)Price P MC 2. This will be 2 3. This will be 3 ATC MR Price =MC = Minimum ATC (normal profit) The graph above shows the long-run equilibrium for a competitive market. Assume that in Saudi Arabia, we manage to have pure competition for all goods and services. Assume, in the long-run, we witness the above equilibrium for the entire economy. In terms of welfare outcome, 1. This will be 1 outcome for consumers. outcomes for producers. outcome for the society. The number 1 statement above is true because consumers_4 The number 2 statement above is true because producers 5 The number 3 statement above is true because the society 6Suppose the market for peaches is perfectly competitive. The short-run average total cost and marginal cost of growing peaches for an individual grower are illustrated in the figure to the right. Assume that the market price for peaches is $28.00 per box. What is the profit-maximizing quantity for peach growers to produce? boxes. (Enter your response as an integer.) Price (dollars per box) 40- 36- 32- 28- 24- 20- 16- 12- 8- 4- 0 10 20 30 40 50 60 70 80 Output (boxes of peaches per day) MC ATC 90 100 oo Q
- The graph below depicts the cost structure for a firm in a competitive market. Price P4 P3 P₂ P₁ PPPP I MC AVC Q₁ Q₂ Q3 Q4 When prices rise from P2 to P3 the firm finds that: a. marginal cost exceeds marginal revenue at a production level of Q2. b. if it produces at output level Q3 it will earn a positive profit. c. expanding output to Q4 would leave the firm with losses. d. it could increase profits by lowering output from Q3 to Q2. ATC QuantitySuppose that each firm in a competitive industry has the following costs: Totalcost:TC=50+1/2q2 Marginalcost:MC=q where q is an individual firm's quantity produced. The market demand curve for this product is Demand:QD=120−P where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market.a. What is each firm's fixed cost? What is its variable cost? Give the equation for average total cost.b. Graph average-total-cost curve and the marginal-cost curve for qfrom 5 to 15. Atwhat quantity is average-total-cost curve at its minimum? What is marginal cost and averagetotal cost at that quantity?c. Give the equation for each firm's supply curve.d. Give the equation for the market supply curve for the short run in which the number of firms is fixed.e. What is the equilibrium price and quantity for this market in the short run?f. In this equilibrium, how much does each firm produce? Calculate each firm's profit or loss. Is there incentive for firms to…You are given the following information for a producer of organic grommets in a perfectly competitive market. TFC = $8 Market price = $13 Quantity MC ($) 1 10 2 8 3 9 4 11 5 14 6 18 The marginal cost of production appears in the table above. What is the profit-maximizing output? Is the firm making a profit or loss? How much?