Consider the following setup for a perfectly competitive market: Suppose that for the firm, TC=625+Q^2 and MC=2Q, and for the industry, demand is given by P=100-Q and supply is given by S=Q. However, suppose now that there is an increase in demand, so that demand is given by and for the industry, demand is given by P=500-Q. Will this market outcome be sustainable? That is, do you expect firms to leave the market, enter the market, or neither? a. Firms will enter the market. b. Firms will leave the market. c. Firms will neither enter nor leave the market. d. There could be barriers to entry.
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14. Consider the following setup for a
a. Firms will enter the market.
b. Firms will leave the market.
c. Firms will neither enter nor leave the market.
d. There could be barriers to entry.
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- QUESTION 12 Consider the following setup for a perfectly competitive market: Suppose that for the firm, TC=625+Q² and MC =2Q, and for the industry, demand is given by P= 100-Q and supply is given by S = Q After having solved for market price, determine the firm's profit maximizing level of output and the corresponding profit. O Q=50, Profit=0 O Q=25, Profit= - 30,000 O Q=25, Profit=0 O Q=50, Profit=50If there were 20 firms in this market, the short-run equilibrium price of copper would be ______________ per pound. At that price, firms in this industry would ____________ . Therefore, in the long run, firms would ____________ the copper market. Because you know that perfectly competitive firms earn economic profit in the long run, you know the long-run equilibrium price must be _____________ per pound. From the graph, you can see that this means there will be ___________ firms operating in the copper industry in long-run equilibrium. True or False: Each of the firms operating in this industry in the long run earns negative accounting profit.The handmade snuffbox industry is composed of 100 identical firms each having short-run total costs given by , where q is the output per day.20.5105STCqq=++(a) What is the short-run supply curve for each firm? What is the short-run supply curve for the market?(b) Suppose the demand is given by . What will be the equilibrium (both quantity and 110050QP=-price) in this marketplace? (c) What will each firm’s short-run profits be?
- Suppose that each firm in a competitive industry has the following costs: Total cost: TC= 50 + 0.5Q^2The market demand curve for this product is: Qd= 120 − PThere are 9 firms in the market.e) What is the equilibrium price and quantity for this market in the short run? In this equilibrium, how much does each firm produce? Calculate each firm’s profit.f) In the long run with free entry and exit, what is the equilibrium price and quantity in thid market. Is there incentive for firms to enter or exit? h) In this long-run equilibrium, how much does each firm produce? How many firms are in the market?Consider a firm in a perfectly competitive market with total costs given by ??=?3 −15?2 +100?+30 a. What is this firm's marginal cost function? Over what range of output are the firm's marginal costs decreasing? Increasing?b. Suppose that the market price is $52. What is this firm's profit-maximizing level of output? How do you know this is the profit-maximizing output? How much profit does this firm earn by producing the profit-maximizing output?If there were 60 firms in this market, the short-run equilibrium price of titanium would be $________ per kilogram. At that price, firms in this industry would (earn a positive profit, shut down, earn zero profit, operate at a loss). Therefore, in the long run, firms would ( enter, exit, neither enter nor exit) the titanium market. Because you know that perfectly competitive firms earn (positive, zero, negative) economic profit in the long run, you know the long-run equilibrium price must be $_______ per kilogram. From the graph, you can see that this means there will be (20, 40, 60) firms operating in the titanium industry in long-run equilibrium.
- If there were 30 firms in this market, the short-run equilibrium price of copper would be______ per pound. At that price, firms in this industry would . Therefore, in the long run, firms would _______ the copper market. Because you know that competitive firms earn_____ economic profit in the long run, you know the long-run equilibrium price must be__________ per pound. From the graph, you can see that this means there will be _______ firms operating in the copper industry in long-run equilibrium. True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns positive accounting profit. True FalseConsider a perfectly competitive market where the demand for the good is given by Q-769-5p, where Q denotes the quantity demanded at price p. On the supply side, the good can be produced by identical firms with U-shaped average cost curves. The total cost of the industry as a function of total output, Q, is given by C(Q) = 5 Q What is the (long run) equilibrium price in this market? (As usual, you must enter a number below, not a ratio, not an expression with symbols..., just a number. Don't round, even if rounding makes sense...)Consider a perfectly competitive market where the demand for the good is given by Q-769-5p, where Q denotes the quantity demanded at price p. On the supply side, the good can be produced by identical firms. The total cost of the industry as a function of total output, Q, is given by C(Q) = 5 Q What is the (long run) equilibrium quantity in this market? (As usual, you must enter a number below, not a ratio, not an expression with symbols..., just a number.)
- Suppose 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.1. Give the equation for the market supply curve for the short run in which the number of firms is fixed.2. What is the equilibrium price and quantity for this market in the short run?3. In this equilibrium, how much does each firm produce? Calculate each firm's profit or loss. Is there incentive for firms to enter or exit?4. In the long run with free entry and exit, what is the equilibrium price and quantity in this market?5. In this long-run equilibrium, how much does each firm produce? How many firms are in themarket?Suppose that the seitan industry is initially operating in long-run equilibrium at a price level of $5 per pound of seitan and quantity of 25 million pounds per year. Suppose a top medical journal publishes research that animal-alternative protein sources such as seitan could decrease your expected lifespan by 5 years. The publication is expected to cause consumers to demand seitan at every price. In the short run, firms will respond by ▼ Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the publication. PRICE (Dollars per pound) 10 9 8 7 6 5 2 1 0 10 In the long run, some firms will respond by 9 0 8 5 7 Supply Demand 10 15 20 25 30 35 QUANTITY (Millions of pounds) 40 45 50 Demand Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the blication and the new long- run equilibrium after firms and consumers finish adjusting to the news. Supply 1 Supply O Demand…The demand curve and supply curve for carpet cleaning in the local market are currently as follows: Demand: Q = 1,000 - 1OP Supply: Q = 640 + 2P The total cost function for the typical carpet cleaning company is: TC= 75 + 3q2 (so that FC=75, VC=3q2 and MC= 6q), where costs are measured in dollars and q is output per year. The market is perfectly competitive. First question how do I calculate the optimal output for the typical carpet cleaning firm in the short run and how many firms would operate in the market in the short run? Second, how would I compute operating profits and total profits for the typical firm in the short run. Based on the results so far, would you say that this market is at the long-run equilibrium?