How much output should the firm produce in the short-run

Assignment Help Microeconomics

Reference no: EM13741184

For each of the following market structure characteristics, insert the correct Market Type(s). There may be more than one. Use these abbreviations: PC - perfect competition; MC - monopolistic competition; and M - monopoly.

Market Structure Characteristic	Market Type
Advertising is not effective for the individual firm.
MR<D
The seller is a price-taker.
Neither an individual buyer nor seller can affect the market demand and supply curves.
Long-run economic profits are possible.
In long run equilibrium, each supplier produces where SRATC and LRATC are at a minimum.
Advertising is used extensively.
In equilibrium, P = MR = MC.
Profits are maximized at the output where MR = MC
P>MR
Product is unique.
In equilibrium, products cannot be produced at a lower cost or sold at lower price.
Economies of scale are often a barrier to entry.
Products have many close substitutes.

2. Assume a perfectly competitive market structure. Complete the diagram to show the profit maximizing price and quantity. Label each (use Insert textbox). Is the firm earning economic profits or losses? If so, what will occur over the long-term?

3. A firm sells its product in a perfectly competitive market where other firms charge a price of $80 per unit. The firm's costs are C(Q) = 40 + 8Q + 2Q². Show your computations.

a. How much output should the firm produce in the short-run?

b. What price should the firm charge in the short-run?

c. What are the firm's short-run profits?

d. What adjustments should be anticipated in the long-run?

4. Complete the diagram showing the profit maximizing price and quantity. Label each. Show and label the deadweight loss (In MS Word, use Insert/Curved Connector, a curved line).

5. A firm is a monopoly with demand and cost functions given by P = 200 - 2Q and C(Q) = 2,000 + 3Q²respectively. Show your computations.

a. Show the equations for MR and MC.

b. Compute the profit maximizing quantity.

c. What is the price at the profit maximizing quantity?

d. Compute total revenue.

e. Compute total cost.

f. What are the profits?

Reference no: EM13741184

Questions Cloud

What are the one-time costs that the company must pay : Carefully read the Scenario/Summary given above and identify the benefits, one-time costs, and recurring costs associated with this proposed project. What are the one-time costs that the company must pay before putting the new system into operatio..

How to increase total revenue : Assess a raise in tuition and if it will necessarily result in more revenue - Describe the conditions under which revenue will (a) rise, (b) fall, or (c) remain the same.

Write research paper on selected aspect of atlantic history : write a research paper on a selected aspect of Atlantic history. The selection of the topic is up to the student, though it must also be approved by the instructor.

Describe the similarities in the quality improvement : Describe the similarities in the quality improvement philosophies of Deming, Juran, and Crosby. Include a title page and 3-5 references. Only one reference may be from the internet (not Wikipedia). The other references must be from the Grantham ..

How much output should the firm produce in the short-run : How much output should the firm produce in the short-run and what price should the firm charge in the short-run - what are the firm's short-run profits

Discuss and describe the three economic systems : Discuss and describe the three economic systems. In your opinion, which economic system is the most common and why? How would you use this knowledge as a global leader

Relationship between critical thinking and ethics : Write a 200- to 350- word explanation of the relationship between critical thinking and ethics.

Discuss the main implications of the sudden changes of ted : Please define and update the so-called TED spread (which we discussed in class) upto recent years. Discuss the main implications of the sudden changes of the TED spread on international lending and borrowing

Define recreation and its importance to human wellness : Define recreation and its importance to human wellness. Use examples from your own experience, if possible. Discuss the factors that affect an individual's decision to participate in recreational activities.

User Account

All Pages