Consider the market for ice cream. Suppose that this market is perfectly competitive. The cost structure of the typical ice cream producer is as follows. Average total cost is equal to ATC(Q) : 1 50 + ÷Q, average variable cost is equal to AVC(Q) =÷Q, and marginal cost is equal to MC(Q) = Q. %3D How many ice cream cones will each producer sell in a long-run equilibrium in the market for ice cream?
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- Consider the market for ice cream. Suppose that this market is perfectly competitive. The cost structure of the typical ice cream producer is as follows. Average total cost is equal to 50 1 1 ATC(Q) +÷Q, average variable cost is equal to AVC(Q) =;Q, and marginal cost is equal to 2 MC(Q) = Q. Now, suppose that a new scientific study comes out that shows that soil pollution from rock salt (a key input for making ice cream) is extremely hazardous to human health. In response, the government decides to impose harsh re-zoning restrictions on any land once used for making ice cream. This reduces the market rent for land used to make ice cream, which in turn lowers the opportunity cost of operating an ice cream factory. This reduction in the opportunity cost of capital causes the total fixed cost of ice cream production to fall to 32, but there is no change to variable cost. Give formulas for the typical ice cream producer's new average total cost curve ATC(Q) and marginal cost curve MC(Q).The market for drones is perfectly competitive. Assume for simplicity that fractions of everything, including number of firms, is possible. We have identical firms, each with a Total Cost curve of TC=862+q^2 and Marginal Cost curve MC=2q. Market demand is Q=856-2P. What is the number of firms in the market in the long run equilibrium?Consider the market for ice cream. Suppose that this market is perfectly competitive. The cost structure of the typical ice cream producer is as follows. Average total cost is equal to 50 ATC(Q) +;Q, average variable cost is equal to AVC(Q) Q, and marginal cost is equal to = - 2 2 MC(Q) = Q. What is the long-run market equilibrium price for ice cream?
- Consider a firm in a competitive industry . The firm's average cost curve and marginal cost curve are depicted below . All firms in the market are identical . Suppose the market is in equilibrium , and the firm is currently losing $ 1.200 daily . Use the point tool to indicate the quantity / price point at which this firm must be producing .Assume a number of street vendors sell hamburgers in a city. Each vendor has a marginal cost of 30 NOK per hamburger sold and there are no fixed costs. The maximum number of hamburgers that any vendor can sell is 100 per day. a) If the market is perfectly competitive and the price of each hamburger is 40 NOK. How many hamburgers does each street vendor want to sell and what is each vendor’s profit per day assuming the desired quantity is sold?b) Why is this solution not a long run equilibrium?c) Suppose all the vendors merges and thus appears as a monopolist in the market. After merging marginal cost is constant. Make a diagram and explain the optimal solution for the monopolist.d) How can you explain that the solution from c) is such that the profit is maximized?e) Explain the social costs of the monopoly situation in this market. f) Suppose many consumers in this hamburger market became “addicted”. How would you explain this change in consumers demand and how would it affect social…Consider the competitive market for dress shirts. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. For each price in the following table, use the graph to determine the number of shirts this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero shirts and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price.
- Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. For each price in the following table, use the graph to determine the number of jackets this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero jackets and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price. Price Quantity Produce or Shut Down? Profit or Loss? (Dollars per jacket) (Jackets) 4 8 12 36 48 60 On the following graph, use the orange points (square…Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. For each price in the following table, use the graph to determine the number of jackets this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero jackets and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price.Consider the market for ice cream. Suppose that this market is perfectly competitive. The cost structure of the typical ice cream producer is as follows. Average total cost is equal to 50 1 1 ATC(Q) +;Q, average variable cost is equal to AVC(Q) =÷Q, and marginal cost is equal to 2 MC(Q) = Q. a.) Give a formula for the typical ice cream producer's average fixed cost AFC(Q). What is the typical ice cream producer's total fixed cost?
- Suppose, at a given point in time, Lynn's Licorice Loft sells licorice in a perfectly competitive market and is producing its profit-maximizing level of output. Suppose further that at this level of production Lynn's average total cost of producing licorice is $1.20, her average variable cost is $1.00, and her marginal cost is $1.30. Over time, the number of licorice sellers in the market will....In the long-run equilibrium of a competitive market with identical firms, what are the relationships among price (P), marginal cost (MC), and average total cost (ATC)?A perfectly competitive firm sells its good for $20. If marginal cost is four times the quantity produced, how much does the firm produce? Why? Assuming perfect competition, there is not enough information to determine how much the firm is producing. Assuming perfect competition, the firm is producing where MC is twice MR. If the price is $20, then MC is $40. This means that the firm is producing 10 units. Assuming perfect competition, the firm is producing where MR = MC. If the price is $20 and MC is four times the quantity, it is producing 80 units. Assuming perfect competition, the firm is producing where MR = MC = P. Since price is $20, MR is $20. If MC is 4 times the quantity, it is producing 5 units.
