economics

Q AC MC
1 4 12
2 8 20
3 12 28
4 16 36
5 20 44
6 24 52
7 28 60
8 32 68
9 36 76

suppose that there are 70 firms in operating in the industry. using the MC curve, find out how much output in total is delivered to the market at each price (you only need to consider prices equal to the MC values above). now assume that the market demand curve is given by p = 305 - .5Q, where p is the market price. for purposes of this problem, it is helpful to "invert" the demand curve, writing Q in terms of p. this gives Q = 610 - 2p.

a) when p = 44 the market has a) excess supply or b) excess demand equal to ? units
when p = 68, the market has a) excess supply or b) excess demand equal to ? units.

b) find the market equilibrium price, and compute output per firm and profit per firm at this price (you need only check prices corresponding to the above MC values). the equilibrium price is p = ?, output per firm is Q = ?, and profit per firm equals ?.

c) suppose that producers feel that they are not earning enough profit and, as a result, they lobby the government to institute a "price support program." they convince the government that a "fair" price for widgets is $76. to guarantee that this price is realized, the government has to go into the market and buy output, which it then puts in a warehouse for indefinite storage. the government must buy ? units of output to reach its price target. the price support program raises profit per firm to ?.

asked by john
  1. qewr

    posted by Anonymous

Respond to this Question

First Name

Your Response

Similar Questions

  1. Economics

    What is the computing? in terms of math Industry structure is often measured by computing the Four-Firm Concentration Ratio. Suppose you have an industry with 20 firms and the CR is 20%. How would you describe this industry?
  2. economics, math

    Could you please help me with this problem: Consider an oligopolistic market with two firms. Each of them produces using a cost function given by c(q)=q2. The aggregate demand in the market is given by 1000−p. Suppose that,
  3. Economics

    Suppose that some firms in a competitive industry are earning zero economic profits, while others are experiencing losses. All else equal, in the long run, we would expect the number of firms in the industry to A. increase. B.
  4. economics

    Suppose that the economy consists of two types of firms: type A firms which produce output using a technology Qa=Min(1/3K,L) and type B firms which produce output using a technology Qb=Min(1/2K,L). Type A output sells for $1.00,
  5. Economics

    Do all firms in all market structures have anything in common? I think not. They all consist of buyers and sellers. In Principals of Microeconomics courses, economists make several general economic assumptions (perhaps incorrectly
  6. CALCULUS ECONOMICS

    Consider an oligopolistic market with two firms. Each of them produces using a cost function given by c(q)=q^2. The aggregate demand in the market is given by 1000−p. Suppose that, in order to increase production, the
  7. Economics

    An industry has only two firms producing outputs y1 and y2, respectively. The first firm has a cost function of TC(y1) = 20 + 20y1 and the second has a cost function TC(y2) = 10 + 5y2 + y22. The demand function for the product
  8. Economics

    An industry has only two firms producing outputs y1 and y2, respectively. The first firm has a cost function of TC(y1) = 20 + 20y1 and the second has a cost function TC(y2) = 10 + 5y2 + y22. The demand function for the product
  9. Economyst

    Posted by economyst on Wednesday, November 26, 2008 at 8:46am in response to Economics. Do a little research, then take a shot. What do you think? My thinking is 40% CR, and smaller frims would thrive, due to less overhead. What
  10. Economics

    Suppose the economy consists of two types of firms: Type A firms which produce output using a technology Qa=Min(K,1/2L) and Type B firms which produce output using the technology Qb=Min(K,L). The economy has exactly forty units of
  11. Economics

    The spirit of equating marginal cost with marginal revenue is not held by a.perfectly competitive firms. b.oligopolistic firms. c.perfectly competitive firms and oligopolistic firms. d.none of the statements associated with this

More Similar Questions