1. ) in the short run, profitability of any firm in any structure could be posit
ID: 1122859 • Letter: 1
Question
1. ) in the short run, profitability of any firm in any structure could be positive, negative, or break even
True or false
2. ) The demand for a product is P= 200-Q. if the market is strucured as a monopoly, the monopolist has total costs given TCm=2Q+.5^2, and marginal revenue is given as MR=200-2Q, marginal costs given by MCm=2+Q. How much the firm should produce to maximize profit??
options: 134, 66, 102, 59
3.) a perfectly competitive firm can sell its output for the market price of 10 dollars. its short run cost function is given as TC = 3000+Q+.005Q*Q, where MC = 1+.01Q, what is this firms MR?
Options : 11,12,8,10
4.) a perfectly competitive firm can sell its output for the market price of 10 dollars. its short run cost function is given as TC = 3000+Q+.005Q*Q, where MC = 1+.01Q, what is this firms profit maximization output?
options : 800, 850, 1000, 900
5.)a perfectly competitive firm can sell its output for the market price of 10 dollars. its short run cost function is given as TC = 3000+Q+.005Q*Q, where MC = 1+.01Q, what is this firms PROFIT?
options: 1050, 4500, 800, 900
Explanation / Answer
Q1
Answer
True
In short run, profitability of any firm in any structure could be positive, negative, or break even because the product might new so the market share is lower, there may be no close substitutes and many things effect short run because the short run is a time where some of the inputs are fixed and the firm can not shut down if it is making losses or no new firm enter the market if the market is in profit.
Q2
the monopolist produces at MR=MC
MR=200-2Q........the MR curve is double sloped than demand curve
MC=2+Q
equating both
200-2Q=2+Q
3Q=198
Q=66
P=200-66=134
the price is $134
Q3
The perfectly competitive firm has MR=MC at all the output level because the demand curve is horizontal
MR=$10
Q4
Answer
equating MC=P
1+0.01Q=10
0.01Q=9
Q=900
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.