What is the typical firm short-run supply curve

Assignment Help Business Economics
Reference no: EM131388858

Suppose there are 2000 identical firms producing pumpkins in a perfectly competitive market and that the total cost curve for each firm is given by TC= (1/2q^2+5q+20.5) and MC = q+5.

A) What is the typical firm's short-run supply curve?

B) Derive and graph the market short-run supply curve.

C) If the market demand curve is P=20 - (1/1000)Qd what are P* and Q* in the short-run? Show the algebra and graph

D) Derive and graph the market marginal revenue curve.

E) How many pumpkins is each pumpkin farm producing? Show your work using the profit maximizing rule!!

F) Are there profits in this market? Calculate each firm’s profits, and then multiply it by the number of firms. If so, what are they and are they sustainable in the long run?

G) Graphically illustrate the consumer and producer surplus at the market equilibrium.

H) Suppose Linus decides to buy out all 2000 pumpkin firms at once and monopolize the pumpkin market. Assume he successfully buys everyone's firm and that there are no cost advantages associated with being a monopolist (his costs don’t change when he becomes a 14 monopoly). Also assume the demand is the same whether the market is perfectly competitive or monopolistic. Graph the demand and MC curve for?Linus’ company. (Hint: Linus wants the MC to be equal for all his 2000 plants/pumpkin producing locations, so he will add up the MC, just like you did in the perfect competition case above, however, P does not equal MC in a monopoly.)

I) What is the monopoly’s profit maximizing quantity and price? Hint: What is Linus’ MR?

J) How many pumpkins are produced by each plant (pumpkin producing location) within the giant firm?

K) How profitable is each plant? Based on that number, what are Linus’ profits as the monopolist? Are these sustainable in the long run?

I) Graphically illustrate the producer and consumer surplus and any inefficiency. Discuss how these are different than the perfectly competitive case.

M) Do you believe costs wouldn’t change if when the many firms are merged into a single firm? Use returns to scale in your answer. Would there be increasing, decreasing or constant returns to scale if 2000 firms merged into one? Defend your answer and discuss how it will affect costs.

Reference no: EM131388858

Two strategies of low cost and high quality a trade-off

Under what conditions are the two strategies of low cost and high quality a trade-off? Under what conditions would the efficient frontier not be an appropriate picture of the

Dollar is trading on the foreign exchange market

One U.S. dollar is trading on the foreign exchange market for about 1.47 Chesterfield ales (the Chesterfield currency). Therefore, one Chesterfield ale would have purchased ho

Reduce the quantity transacted on the market by two units

The demand for a product is given by P = 350 − 2Q and the supply is P = 30 + 4Q. What is the increase in the tax rate needed to reduce the quantity transacted on the market by

The demand curve for cookies is downward sloping

The demand curve for cookies is downward sloping. When the price of cookies is 2 dollars, the quantity demanded is 100.If the price rises to 3 dollars, what happens to consume

The strategic planning and budgeting process of most firms

Capital budgeting is an integral part of the strategic planning and budgeting process of most firms. Explain and provide a numerical example of the use of the internal rate-of

What is the bertrand model and cournot-stackelberg model

What are the advantages of the HHI over concentration ratios in measuring the degree of concentration in an industry? What is the Bertrand model? What is its relationship to t

One form of price discrimination is bundling

One form of price discrimination is bundling. Rather than make up a problem and require you to solve it, you make up a problem for me! Here are the rules: Keep it simple: 3 co

Which of the projects if any should be selected

Their costs and benefits are presented in the table below. Each project has a useful life of 50 years and the MARR is 12% per year. Which of the projects, if any, should be

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd