. The supply side of the market for rose quartz jewelry (q) consists of 10 identical...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
. The supply side of the market for rose quartz jewelry (q) consists of 10 identical firms operating in perfect competition with each other. Each firm has a marginal cost function given by Questions: MC(q) = (a) The firms are price takers and accept a price of P for each unit they produce. Assuming profit maximizing behavior on the part of these firms, derive the equation of an individual firm's supply curve and write this out in the form q = some function of P. (Hint: a perfectly competitive firm profit-maximizes by following the rule P = MC. Use this and a little algebra to derive an equation for quantity supplied as a function of P.) P (1) ₁ (b) Using your firm supply equation in (a) obtain the supply equation Q(P) of the entire industry (i.e., construct an equation for the total q offered by the all the firms together as a function of the common price P). Write this out in the form Q = some function of P. Then sketch in the industry supply curve in the graph below (note carefully the position of P and Q on the axes) 0 Suppose now that the demand curve facing the industry as a whole is given by the function: Q = 50 - 20P (c) Obtain the values of consumers surplus and producers surplus in equilibrium. Show details of how you obtained your numbers. . The supply side of the market for rose quartz jewelry (q) consists of 10 identical firms operating in perfect competition with each other. Each firm has a marginal cost function given by Questions: MC(q) = (a) The firms are price takers and accept a price of P for each unit they produce. Assuming profit maximizing behavior on the part of these firms, derive the equation of an individual firm's supply curve and write this out in the form q = some function of P. (Hint: a perfectly competitive firm profit-maximizes by following the rule P = MC. Use this and a little algebra to derive an equation for quantity supplied as a function of P.) P (1) ₁ (b) Using your firm supply equation in (a) obtain the supply equation Q(P) of the entire industry (i.e., construct an equation for the total q offered by the all the firms together as a function of the common price P). Write this out in the form Q = some function of P. Then sketch in the industry supply curve in the graph below (note carefully the position of P and Q on the axes) 0 Suppose now that the demand curve facing the industry as a whole is given by the function: Q = 50 - 20P (c) Obtain the values of consumers surplus and producers surplus in equilibrium. Show details of how you obtained your numbers.
Expert Answer:
Answer rating: 100% (QA)
ANSWER a In perfect competition each firm is a price taker which means that they cannot influence th... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0078025839
9th edition
Authors: J. David Spiceland, James Sepe , Mark Nelson , Wayne Thomas
Posted Date:
Students also viewed these economics questions
-
[The following information applies to the questions displayed below.] Hitzu Co. sold a copier costing $4,800 with a two-year parts warranty to a customer on August 16, 2013, for $6,000 cash. Hitzu...
-
During one month, 45 preflight inspections were performed on an airplane at Southstar Airlines. 15 nonconformances were noted. Each inspection checks 50 items. Assuming 2 sigma off-centering, what...
-
A university lab is a research contractor to NASA for in-space fuel cell systems that are hydrogen- and methanol-based. During lab research, three equal-service machines need to be evaluated...
-
Answer the Multple Choice Questions and the code for problem 6in the end PROBLEM 1: General UNIX 1. What is UNIX? a) an operating system b) a text editor c) programming language d) software program...
-
What is the role of the FASB in financial reporting?
-
What is the signature of a function and how is a function's signature related to name mangling in \(\mathrm{C}++\) ? How do you think this facilitates how overloaded functions are handled internally...
-
How to draft a pretrial memorandum?
-
Stephanie owns a small warehouse that is insured for $200,000 under a commercial property insurance policy. The policy contains an 80 percent coinsurance clause. The warehouse sustained a $50,000...
-
Describe how standard costs are determined by a manufacturing company.Describe 2 types of standard cost variances that are used by management to assess both the efficiency and effectiveness of...
-
Refer to the data set pit.csv. Find a confidence interval of the specified level for the mean depth of pits for the following durations and humidity levels. When the sample size is 30 or less,...
-
Question Integrate f(x, y, z) = x + y+z over the solid region inside 2+ y+z = 16.
-
DeBond Industries has outstanding a $1,000 face-value bond with an 8% coupon interest rate. The bond has 12 years remaining to its maturity date. If interest is paid annually, find the value of the...
-
How do Giddens' structuration theory and Bourdieu's concept of habitus provide differing accounts of the relationship between individual agency and social structures, and what implications does this...
-
If you add 700 kJ of heat to 700 g of water originally at 70.0 C, how much water is left in the container? (The latent heat of vaporization of water is 22.6x105 J/kg and its specific hat capacity is...
-
1. Why is Dollar Tree increasing prices? 2. How will the price change affect Dollar Store's strategy, and how does it compare to what competitors are doing? 3. What do you think the long term impact...
-
The market value of the assets of a corporation is currently $195.0 million, and the firm has on issue a debt outstanding that has a par value of $125.0 million and a due date of exactly four years....
-
How favorably do your company's costs compare on the benchmarking data provided in the most recent year's Footwear Industry Report? On how many of the benchmarking measures were your company's costs...
-
You are interested in investing and are considering a portfolio comprised of the following two stocks. Their estimated returns under varying market conditions are provided: (note: it is difficult to...
-
Classified Electronics has an unfunded retiree health care plan. Each of the company's three employees has been with the firm since its inception at the beginning of 2017. As of the end of 2018, the...
-
Don James purchased a new automobile for $20,000. Don made a cash down payment of $5,000 and agreed to pay the remaining balance in 30 monthly installments, beginning one month from the date of...
-
When is an estimated loss on a long-term contract recognized, both for contracts that recognize revenue over time and those that recognize revenue at the point in time the contract is completed?
-
A reversible process is a process (a) Which proceeds with no driving force (b) Which takes place spontaneously (c) Which is quasi-static (d) Which is frictional process.
-
At constant temperature and pressure, the free energy for a chemically reacting system at equilibrium is (a) Minimum (b) Maximum (c) Can not be predicted (d) None of these.
-
The operation of a throttling device follows the (a) Zeroth law of thermodynamics (b) First law of thermodynamics (c) Second law of thermodynamics (d) Third law of thermodynamics.
Study smarter with the SolutionInn App