dolution.
1. Suppose a firm has the following total cost function: TC = 100 + 4q2.
a. What is the minimum price necessary for the firm to earn profit?
b. Below what price will the firm shut down in the short run?
2. A firm operating in a purely competitive environment is faced with a market price of $250. The firm’s total cost function is: TC = 6,000 + 400Q -20 Q2 + Q3
a. Should the firm produce at this price in the short run?
b. If the market price is $300, what will total profits/losses be if the firm produces 10 units of output?
c. If the market price is greater than $300, should the firm produce in the short run?
3.Suppose a perfectly competitive firm has the short-run cost function C = 125 + q 2 . Determine the firm’s output level and profit at prices of $30 and $20.
4. Suppose the cost function of a firm is given by C(Q)= 250 + 2Q2 . If the firms sell output at a perfectly competitive market at a price of P = $8. What level of output should the firm produce to maximize profits or minimize losses in the short run? What will be the level of profits if the firm makes the optimal decision?
5. Kyle produces chocolate bars with a fixed cost of 16. His variable cost function is: VC = Q2 + 2Q a. Assuming the market for chocolate bars is competitive, derive Kyle’s supply function? b. What is Kyle’s production level if the market price is 12? What is his profit? c. Redo part (b) if the market price is 6? Does he want to stay in this market? Explain. d. Use a graph to show the case of part (c). No numbers are required. e. At what price Kyle will have a break-even case (Normal profit)? Explain.
dolution
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"