Question: 4. Suppose that you estimate the following cost function for your company, which is a firm operating in a perfectly competitive market: TC=100Q-4Q 2 +Q

4. Suppose that you estimate the following cost function for your company, which is a firm operating in a perfectly competitive market:

TC=100Q-4Q2+Q3

The market demand and supply equations are as follows.

QD=134-3P+2Y

QS=24+2P-2PI

where Y= Income = 100 and PI = Price of inputs = 120.

a. Compute and plot the average cost and marginal cost.

b. Over what range of output does economies of scale exist? Diseconomies of scale?

c. How many units of output will you produce and what price will you charge for each unit?

d. Is the company making a profit or loss at the suggested output level? How much?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Okay here are the steps to solve this problem a To find Average Cost ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Q:

1. In the short-run, there are three stages of production. Identify or define each of these and then discuss why a Manager would never knowingly produce in either Stage I or Stage III. 2. Suppose you...

Q:

Fixed amount of Land for Oil Drilling: Suppose that your oil company is part of a competitive industry and is using three rather than two inputslabor , capital k and land L to produce barrels of...

Q:

1. The construction industry was enjoying good time three years ago. During those year, your company bought few excavators to stay competitive in the market. Unfortunately business environment...

Q:

4. Suppose that you estimate the following cost function for your company, which is a firm operating in a monopolistically competitive market: TC=180Q-8Q 2 +0.5Q 3 You also estimate the following...

Q:

Suppose that you estimate the following cost function for your company, which is a firm operating in a monopolistically competitive market: TC= 180Q-8Q^2+0.5Q^3 You also estimate the following demand...

Q:

Suppose that you estimate the following cost function for your company, which is a firm operating in a monopolistically competitive market: TC = 180Q - 8Q 2 + 0.5Q 3 You also estimate the following...

Q:

Suppose that you estimate the following cost function for your company, which is a firm operating in a monopolistically competitive market: TC=180Q - 8Q 2 + 0.5Q 3 You also estimate the following...

Q:

4. Suppose that you estimate the following cost function for your company, which is a rm operating in a monopolistically competitive market: TC :130Q 8Q2 + 0.5g3 You also estimate the following...

Q:

Suppose that you estimate the following cost function for your company, which is a monopolistically competitive firm Ic=1sno dour? , and the following demand curve for your product: Paw5g How many...

Q:

1.Suppose that you estimate the following cost function for your company, which is a firm operating in a monopolistically competitive market: You also estimate the following demand curve for the...

Q:

Define velocity. Discuss the role of velocity in the quantity theory of money.

Q:

Nine hundred dollars worth of newly acquired redwood deck furniture (not covered by insurance) which was left out on the porch of his cottage was missing when he returned to the cottage after a weeks...

Q:

If f ( x ) = 3 x 2 x + 5 , find the following. f ( 1 ) = f ( 1 ) = f ( a ) = f ( a ) = f ( a + 1 ) = 2 f ( a ) = f ( 2 a ) = f ( a 2 ) = [ f ( a ) ] 2 = f ( a + h ) =

Q:

Question 1 Fill in the blanks to make the following statements correct. 1.1 Money serves 3 functions: _____________, ___________, and ___________. 1.2 Suppose children at a summer camp are each given...

Q:

Let f(x) be a continuous function satisfying f(x) = (x2 + 1) f(t) dt + 2x. Compute f(0.9) approxi- mately.

Q:

In your opinion what are the top 3 skills and attributes (characteristics) a successful Project Manager should possess? Please provide an explanation on why you selected these skills/attributes...

Q:

Is ABC appropriate for an organization that sells a wide range of customized products manufactured using flexible manufacturing systems? Why or why not?

Q:

Keener produces two products: regular boomerangs and premium boomerangs. Last month 1,200 units of regular and 2,400 units of premium were produced and sold. Average prices and costs per unit for the...

Q:

Red Dog Products manufactures toys for dogs and cats. The most popular toy is a small ball that dispenses tiny treats and is placed within a larger ball. To get the treats, dogs must roll the balls...

Q:

For any events A and B with , show tha .

Q:

Return to the credit card scenario of Exercise 12 (Section 2.2), where , , , , and . Calculate and interpret each of the following probabilities (a Venn diagram might help). a. b. c. d. e. Given that...

Q:

The accompanying table gives information on the type of coffee selected by someone purchasing a single cup at a particular airport kiosk. Blood Group O A B AB 1 .082 .106 .008 .004 Ethnic Group 2...