Suppose that each firm in a competitive industry has the following costs: Total Cost: TC = 50 + £ q? Marginal Cost: MC = 9 where q is an individual firm's quantity produced

Economics Oct 31, 2020

Suppose that each firm in a competitive industry has the following costs: Total Cost: TC = 50 + £ q? Marginal Cost: MC = 9 where q is an individual firm's quantity produced. The market demand curve for this product is: Demand QD = 160 - 4P where P is the price and is the total quantity of the good. Each firm's fixed cost is $
What is each firm's variable cost? 9 o 29 0 1 29² 50 + 9 Which of the following represents the equation for each firm's average total cost? 50 + 39 IN
Complete the following table by computing the marginal cost and average total cost for a from 5 to 15. q Marginal Cost Average Total Cost (Dollars) (Dollars) (Units) 5 6 7 8 9 10 11 12 13 14 15 The average total cost is at its minimum when the quantity each firm produces (q) equals Which of the following represents the equation for each firm's supply curve in the short run? 9 0 0 C 120 - 4 50-4
In the long run, the firm will remain in the market and produce it Currently, there are 16 firms in the market. In the short run, in which the number of firms is fixed, the equilibrium price is s and the total quantity produced in the market is units. Each firm produces units. (Hint: Total supply in the market equals the number of firms times the quantity supplied by each firm.) In this equilibrium, each firm makes a profit of (Note: Enter a negative number if the firm is incurring a loss.) Firms have an incentive to the market and the total quantity produced in the market is units. There In the long run, with free entry and exit, the equilibrium price is are firms in the market, with each firm producing units

Expert Solution

Fixed cost

Each firms fixed cost - 50

Total cost consists of fixed cost and variable cost.

Fixed cost is the cost which does not change with quantity produced.

In the TC equation 50 is the fixed cost because it does not change with quantity produced.

Variable cost

Each firms variable cost is (1/2)q²

option c

Variable cost is the cost which changes with quantity produced.

therefore the second term (option c) of TC equation is our variable cost.

Average Total cost

Average Total Cost = Total cost/q

ATC = (50+(1/2)q² )/q

Therefore option d

Complete the following table

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