A.

Suppose a representative firm has the following cost function: C(q) =q, where q defines the output of an individual firm, and>0and>0represent parameters of the model. Derive the firm's fixed costs.

Question 4 options:

FC =

FC =

FC = 0

FC = 1

B.

Suppose the market has the following demand function.: q =p. A representative firm in this market has constant marginal costs of 40. What is the firm's marginal revenue function?

Question 6 options:

MR = 40

MR =p(1 +1/)

MR =p(1 +1/)

MR= 40

C.

The custom T-shirt printing business has many competitors, so that the perfect competition model may be considered a good approximation. Currently the market demand curve is given byQ= 120- 1.5p, whereas the market supply is given byQ=-20+ 2p.

Suppose there is a T-shirt craze that increases demand by 10% (that is, for each price, demand is now 10% greater than it was before the price increase). Determine the change in equilibrium quantity.

Question 9 options:

increases 10%

increases 5.48%

increases 2.44%

increases 8.2%

D.

The custom T-shirt printing business has many competitors, so that the perfect competition model may be considered a good approximation. Currently the market demand curve is given byQ= 120- 1.5p, whereas the market supply is given byQ=-20+ 2p.

Assuming the original demand curve, now suppose there is an increase in the cost of blank T-shirts, an essential input into the business of selling custom T-shirts. Specically, for each unit by each supplier, the production cost goes up by 10%. Determine the new supply curve.

Question 10 options:

Q=-18+2.2p

Q=-22+2p

Q =-22+2.2p

Q=-20+1.82p

F.

The custom T-shirt printing business has many competitors, so that the perfect competition model may be considered a good approximation. Currently the market demand curve is given byQ= 120- 1.5p, whereas the market supply is given byQ=-20+ 2p.

Assuming the original demand curve, now suppose there is an increase in the cost of blank T-shirts, an essential input into the business of selling custom T-shirts. Specically, for each unit by each supplier, the production cost goes up by 10%. Determine the change in equilibrium price.

Question 11 options:

increases by 8.22%

increases by 4.8%

increases by 5.42%

increases by 10%