Suppose a price taking firm has a cost function C = 7+1.5q*+3q, and takes price of p = 30. What is the profit-maximizing quantity for the firm to produce?
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- At what output rate does the firm maximize profit or minimize loss?Given the information from the graph below, draw the cost curve of the firm showing the minimum costs corresponding to the level of output.Mathematical Economics If fixed cost are 20, variable cost per unit are 2 and the demand function is P+ 2Q = 24, find the profit function in terms of Q.
- The graph below shows the demand and cost conditions facing a price-setting firm. What is the maximum amount of profit the firm can earn?Assume demand is: P = 76 – Q - and total cost is: TC = 20 + Q² What is the quantity that maximizes profit? (type your answer below)Assume that a firm in a competitive market faces the following cost information. If the market price for this firm's product is $40, calculate the profit maximizing level of output for this firm using marginal analysis. It may help to create your own cost table and fill in columns for Marginal Cost and Average Total Cost based on the Total Cost information below. a.What is the level of profit for this firm at the profit maximizing output? b.To convince yourself that the quantity you found is indeed the profit maximizing quantity, try calculating what the profit would be at the next higher level of output. What did you find? c. What do you predict will happen in this market over the long run?
- The cost function for Acme Laundry is C(q) = 50 + 30q +q?, where q is tons of laundry cleaned. What q should the firm choose so as to maximize its profit if the market price is p? The output level at which the firm's profit is maximized as a function of p is q =|- (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a fraction can be created with the / character.) If p= 60, then Acme Laundry should produce| units. (Enter your response as a whole number.)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.
- The inverse demand for tea is given by P= 10 – 0.04Q, where Pis the price per a gram of tea and Qis the total number of grams of tea brought to market. There are two tea shops in the market. Shop 1's cost function is given by C = 0.01q,?, where qı is the number of grams of tea it brings to market. Shop 2's cost function is given by C2 = 0.01q2², where qp is the number of grams of tea it brings to market. Given that the two shops compete by setting output (Cournot), answer the following. a) Identify shop 1's reaction function to shop 2's output to within 2 decimal places (e.g. 0.33). 91= Number - Number 92 b) Identify shop 2's reaction function to shop 1's output to within 2 decimal places (e.g. 0.71). q2= Number Number 91 c) To within two decimal places (e.g. 0.63) what is the equilibrium output level of each shop and the equilibrium per gram price for tea. Shop 1 will produce Number grams of tea and shop 2 will produce Number grams of tea. The equilibrium market price is £ NumberCan these be answered as well? Derive the firm's average cost and average variable cost curves. What q should the firm choose so as to maximize its profit if the market price is p?Consider the following graph of the average and marginal cost functions for a firm in a perfectly competitive market. At a price of P=10: (iii) the marginal cost of production is . (iv) the firm's total profit is . (v) the firm's variable profit is .
