Reference no: EM13743041
The auto industry is currently composed of five identical firms. Each firm currently has one plant. It has cost:
TC= 20 + 15 Q + 1.25 Qsquared. (Q is output per year.) The long run costs for each firm involve a minimum average cost for each plant at $25 for 2 or more units per year. It takes 5 years to change plant size. (No plants are currently under construction.) Demand is P=45-Q. Initially there is competition and there are no barriers to entry or exit of firms in the widget industry. In this question what is important is the reasoning and steps to get your answer – not just an equation or graph.
A) Find the MC curve or equation.
B) Find the AVC (average variable cost) curve or equation.
C) Find the AC equation.
D) Find the short run supply curve (or equation) for a competitive firm.
E) Find the short run industry supply curve (or equation).
F) Find the short run: price, industry output, firm output, and firm profit.
G) Suppose that there is a recession and the demand curve suddenly shifts to P=37.5-Q. Please find the new short run: price, industry output, firm output, and firm profit.
H) The recession is now past and demand is back to P=45-Q. Find the long run supply curve (or equation).
I) What are the long run price(s) and quantity (ies)?
J) Suppose the industry as in E above becomes a monopoly. Find the long run equilibrium. What is the monopolist profit?
K) Which equilibrium is better (in a net benefit maximizing sense) long run compettion as in I or long run monopoly as in J. How much better?
|
What kind of demand the company faces
: Choose two real-world companies in different industries, one that you feel faces elastic demand and one that you feel faces inelastic demand. In each case, you are an economist working in the company and you have come to a conclusion of what kind of ..
|
|
Draw a set of short run production curves including total
: Draw a set of short run production curves including the total, average and marginal product curves. Identify on the graph the range of labor input that would be most likely relevant if you faced varying wage levels from zero up until you would cease ..
|
|
Start a fund to provide for his sons education
: Your brother wants to start a fund to provide for his son's education. He plans to deposit $1,426 at his son's first birthday and then an equal additional deposit every year for 8 years. He wants to have enough in the savings account at the end of th..
|
|
Effects of harmful algae blooms
: Write 5-6 page 2200+ words double spaced research paper on "effects of Harmful Algae Blooms on surrounding marine ecosystems" in text citations
|
|
Monopolist profit-find the short run industry supply curve
: Find the short run industry supply curve (or equation). Find the short run: price, industry output, firm output, and firm profit. What are the long run price(s) and quantity (ies)? Suppose the industry as in E above becomes a monopoly. Find the long ..
|
|
Operating at full capacity
: As part of that process, the company wants to set its target Fixed Assets/Sales ratio at the level it would have had had it been operating at full capacity.
|
|
What are the key components of the us health care system
: Characteristics of the U.S. Health Care Delivery System, What are the key components of the U.S. health care system, Have the components changed as a result of the Affordable Care Act
|
|
Develop a formal process to select suppliers
: Your CEO wants to develop a formal process to select suppliers and vendors to meet the company's needs. These needs include office supplies, equipment maintenance, etc. In a two page business memo, explain why selection criteria is needed, ident..
|
|
Fixed cost-variable cost-average cost and marginal cost
: Please make a table in the above form but showing FC (fixed cost), VC (variable cost), AC (average cost), MC (marginal cost), MR (marginal revenue) and find the profit maximizing level of output.
|