User Account

All Pages

Determine the firm profit-maximizing level of output

Assignment Help Microeconomics
Reference no: EM13880832

1. Firm Z, operating in a perfectly competitive market, can sell as much or as little as it wants of a good at a price of $16 per unit. Its cost function is C = 50 + 4Q + 2Q2. The associated marginal cost is MC = 4 + 4Q and the point of minimum average cost is Qmin = 5.

a. Determine the firm's profit-maximizing level of output. Compute its profit.

b. The industry demand curve is Q = 200 - 5P. What is the total market demand at the current $16 price? If all firms in the industry have cost structures identical to that of firm Z, how many firms will supply the market?

c. The outcomes in part (a) and (b) cannot persist in the long run. Explain why. Find the market's price, total output, number of firms, and output per firm in the long run.

d. Comparing the short-run and long-run results, explain the changes in the price and in the number of firms.

Reference no: EM13880832

Questions Cloud

Why is maintaining existing customers so important : What is the one thing that you and your company could do to retain your current customers? Why is maintaining existing customers so important? How do you measure churn or churn rate and why is it an important number to know
Evaluate the company''s business strategy : Evaluate the company's business strategy and global competitiveness plan.
What are the equilibrium price and quantity : Does the typical microchip firm display increasing, constant, or decreasing returns to scale? What would you expect about the real microchip industry? In general, what must be true about the underlying technology of production for competition to b..
How does a change in sales impact the contribution margin? : How does a change in sales impact the contribution margin? Net income?
Determine the firm profit-maximizing level of output : Firm Z, operating in a perfectly competitive market, can sell as much or as little as it wants of a good at a price of $16 per unit. Its cost function is C = 50 + 4Q + 2Q2
How important is follow-up to the solution of a problem : How can brainstorming provide the opportunity for creative problem solving? Why is an understanding of your company's policies important when negotiating a solution to a challenge? How important is follow-up to the solution of a problem
Do you have not only a legal, but a moral right to own a gun : Do you have not only a legal, but a moral right to own a gun? Do you believe that you have either a moral or a legal right to park a car with a loaded gun in a privately owned parking lot, regardless of what the lot's owner wants
How many firms will serve the market : Suppose 10 firms serve the market. Find the individual firm's supply curve. Find the market supply curve. Set market supply equal to market demand to determine the competitive price and output. What is the typical firm's profit?
Identify the product you are shopping for the retailers : Identify the product you are shopping for, the retailers you chose and why. Analyze the three websites based on the following criteria: product quality, price and suggestive selling

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd