Question: Suppose that the short-run cost function for a firm is TC (q) = 0.19-2q +15q + 10. 1. Calculate the average cost and marginal

Suppose that the short-run cost function for a firm is TC (q) = 0.19-2q +15q + 10. 1. Calculate the average cost and marginal cost. 2. From the firm profit maximization behavior, solve the firm's short run supply curve. 3. Now consider the long run equilibrium in a perfectly competitive market. What conditions for the long run equilibrium to hold?

Step by Step Solution

★★★★★

3.41 Rating (145 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

1 Average Cost ACq 01q3 2q 15q 10 q 01q2 2 15 10q Marginal Cost MCq 301q2 2 03q2 2 The average cost is calculated by taking the total cost of producti... View full answer

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 General Management Questions!

What is the long- run cost function for a fixed-proportions production function for which it takes two units of labor and one unit of capital to produce one unit of output as a function of the wage,...

Suppose the total cost function for a firm is given by C (Q) = 100 + Q2. If the firm sells its output in a perfectly competitive market at a price of $10, what level output should the firm produce to...

The short run production function for a firm is Q = 60 + 40L - .5L2. The firm sells its product in a competitive market at price P = $4 per unit. The price of labor is PL = $8. Find the profit...

6. Suppose that the real money demand function for Ecuador is: where Y is real output, r is the real interest rate, and pe is the expected rate of inflation. Real output is constant over time at Y =...

Recall that the general Cobb-Douglas production function, for a firm with a single output and ` inputs, takes the form f(y1, . . . , y`) = Ky1 1 y2 2 . . . y` ` , for strictly positive constants K...

A service facility operates with two service lines. On a randomly selected day, let X be the proportion of time that the first line is in use whereas Y is the proportion of time that the second line...

Suppose that the profit-maximizing quantity of output for a firm in the competitive textile industry is 1 million yards of cloth. If this firm is representative of others in the industry, how can you...

We have said that economic profit is equal to economic revenue minus economic costwhere cash inflows or outflows are not real economic revenues or costs unless they are in fact impacted by the...

Multiple Choice Questions 1. In the long run, which of the following outcomes is most likely for a firm? a. Zero accounting profits but positive economic profits b. Zero accounting profits c....

A portion of the housing market in New York City (and many other cities in the world) is regulated through a policy known as rent control. In essence, this policy puts a price ceiling (below the...

Use a CAS to find the exact area of the surface obtained by rotating the curve about the-axis, if your CAS has trouble evaluating the integral; express the surface area as an integral in the other...

Many organizations are introducing flexible benefit plans. Why? What are the advantages and disadvantages?

1 2 ( x + 6 y ) d x = [ 1 2 x 2 + ( ) x y ] | 1 2 | = 3 2 + ( ) y

a. Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for five years. What is the payback period for this investment under the assumption that the cash inflows occur...

Which of the following activities should be expensed currently as R & D costs? (a) Testing in search for or evaluation of product or process alternatives. (b) Engineering follow-through in an early...

The following audit steps are part of the revenue process audit program. Indicate the assertion supported by the evidence gathered in performing each procedure. a. Select a sample of customers...

Indicate the proper accounting for the following items. (a) Organization costs. (b) Advertising costs. (c) Operating losses.

Presented below is selected information related to Garryowen Company at December 31, 2019. Garryowen reports financial information monthly. (a) Determine the total assets of Garryowen Company at...

Number of trials ( n n) = 18 - Number of successes ( k k) = 9 - Probability of success ( p p) = 0.36

Consider a firm with the production function q = L 1 2 K 1 4 The firm faces a wage rate of w = 20 and a capital rental rate of r = 40. Initially, the firm's capital is fixed at K = 16. (a) Derive the...

1. Which is the correct formula for the total cost of production?Note: TC is total Cost, AFC is average fixed cost, AVC is average variable cost, MC is marginal cost, TVC is total variable cost, TFC...

Please solve 5. Answer all parts (a)-(e) of this question. Consider the following production function: Q = 3K 1 3L 1 3, with marginal products given by MPL = K 1 3 L 2 3 and MPK = L 13 K 2 3. Define...

Macroecon 3 3. The short-run cost function of a firm is given by C(q) = 200 + 55q, where C(q) or T C(q) is total cost, and q is the total quantity of output, both measured in thousands. (a) What is...

The can industry is composed of two firms. Suppose that the demand curve for cans is P = 100 - Q where P is the price (in cents) of a can and Q is the quantity demanded (in millions per month) of...

can you help me find the demand for labor function of output and provide explanation please 2. (33 points) A firm producing widgets faces the following production function: q = kvl, (1) where k is...