MICROECONOMICS

Q.1) Mango LLC, is a small firm engaged in the manufacturing of office furniture. The firm is operating under the condition of perfect competition. The cost function of the firm is estimated to be

TC=720Q-168Q^2+14Q^3

Find the AC of the firm if the firm is producing 20 units of output.

Q.2) The average cost of producing 500 units of a good is $5. The firm incurs a fixed cost of $500

In the form of rent. If the current price of the good is $10 and the firm increases its sales to 750 units, find the profit earned by the business unit, assuming the marginal cost to be constant.

Q.3) A consumer consumes three units of a product. Marginal utilities derived from the three units are $200, $175, $150 respectively. If the price of the good is $150/unit, find the consumer surplus.

Q.4)A TC function of a firm is given by

TC=18Q-0.30Q^2+0.010Q^3

What would be the output at which the Average Cost would be minimum for the firm

Q.5)If the Average Cost Function is given by 500/Q +10 + 5Q +25Q^2, what is the fixed cost of firm?

Is this AC, in the long run or short run market condition.

Q.6)A firm is engaged in cattle raising and jointly produces milk and leather, the Demand function of milk =P1=60-0.5Q1.

Demand function of milk=P2=70-2Q2 where P1 is the price of milk and P2 price of the leather and Q1&Q2 are the quantities of the 2 products respectively,

also MC=40+Q.

how many units of product package should be produced and what price should be set for milk and leather.

Q.7)A firm operating in a perfectly competitive industry has the following cost function TC=500+8Q+0.035Q^2.

Supply and demand function for the industry are as follows

Q1=8500+100P1

Q2=14500-300P2

Identify the situation to justify the existence of this firm