Hi all the questions are relating to production in different markets (Perfect market and Monopoly). I am having trouble understanding them so if I could get the answer and explanation, that would be great.
For the next five questions, consider a perfectly competitive market where each firm faces a market price of P = 16. Each firm's cost function is TC = 50 + 4q + 2q2. What is the price for each firm in the market? Answer: What is output for each firm in the market? Answer: Calculate the profit earned by each firm. It is in the range of: Select one: O a. [0,10) O b. [-10;-0) O C. [20,30) O d. [30,40] O e. [-30;-20) Of. [10,20) O g. [-20;-10) O h. [-40;-30) Will there be entry or exit in this market over the long-run? Select one: O a. There will be entry in this market over the long-run. O b. There will be exit in this market over the long-run. O c. There will be neither entry nor exit in this market over the long-run. What is the zero-profit price? Answer:For the next four questions, assume the market for lobsters is perfectly competitive in Western Australia. Total cost for a rm that harvests q lobsters is given by _ 1 2 TC _ 800 + 5 q . The market demand for lobsters is 0 = 2000 - 5P. Find the output by each rm (q), the market price (P) and the number of rms (n) in operation when the market is in long-run equilibrium. Select one: o a. q=45;P=45;n=45 O b. q=40;P=40:n=40 0c. q=40:P=40:n=45 0d. q=45;P=40:n=40 0 e. q=45;P=40;n=45 Suppose now that the government imposes a $450 luxury tax on each rm. raising costs to _ r 1 2 In the short run. where the number of rms is the same as in the previous question, nd the new short-run output (q) by each rm along with the new market price (P). Select one: 0 a. q=45;P=45 O b. q=45;P=40 O c. q=40;P=40 Q d. q=40:P=45 Calculate the profit or loss earned by each rm in (0?). Will there be entry or exit? Select one: 0 a. There will be exit. 0 b. There will be entry. 0 c. There will be neither entry nor exit. Find the new long-run equilibrium. How much output {q} does each rm produce? What are the market price (P) and the number of rms (n) in operation? Select one: 0 a. q=45:P=45:n=40 Ob. q=40;P=40:n=45 Oc. q=50;P=50;n=35 Od. q=50;P=50;n=40 0 e. q=50;P=45;n=35 For the next three questions, assume a single-price monopoly faces the demand curve P=250-2q and its total cost function is given by TC = F+10q, where F is a fixed cost. Find the profit-maximizing price (P) and output (q) for the monopolist. Select one: O a. q = 40; P = 170 O b. q = 60; P = 130 O c. q = 70; P = 110 O d. q = 50; P = 150 What is the highest value of F that allows the firm to earn profits rather than losses? Answer: Compute the average total cost (ATC) and the marginal cost (MC) when F is at the level that you specified in (Q11). Select one: O a. ATC = 130; MC = 20 O b. ATC = 130; MC = 10 O c. ATC = 200; MC = 10 O d. ATC = 200; MC = 20
