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Consider a Competitive Industry and a Price-Taking Firm That Produces

Question 69
Multiple Choice

Consider a competitive industry and a price-taking firm that produces in that industry.The market demand and supply functions are estimated to be: Demand: img Supply: img where Q is quantity,P is the price of the product,M is income,and img is the input price.The manager of the perfectly competitive firm uses timeseries data to obtain the following forecasted values of M and img for 2021: img The manager also estimates the average variable cost function to be img Total fixed costs will be $2,000 in 2021.Average variable cost reaches its minimum value of _____ units of output. A)1,000 B)1,500 C)2,000 D)2,500

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Q 70
Consider a competitive industry and a price-taking firm that produces in that industry.The market demand and supply functions are estimated to be: Demand: Supply: where Q is quantity,P is the price of the product,M is income,and is the input price.The manager of the perfectly competitive firm uses timeseries data to obtain the following forecasted values of M and for 2021: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2021.The minimum value of average variable cost is $_____. A)$0.50 B)$0.75 C)$0.975 D)$1.00 E)$2.15
Q 71
Consider a competitive industry and a price-taking firm that produces in that industry.The market demand and supply functions are estimated to be: Demand: Supply: where Q is quantity,P is the price of the product,M is income,and is the input price.The manager of the perfectly competitive firm uses timeseries data to obtain the following forecasted values of M and for 2021: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2021.The manager _____ produce since _____________. A)should; $3 > $0.975 B)should; $2.75 > $0.75 C)should not; $2 < $2.15 D)should not; $0.50 < $1.00
Q 72
Consider a competitive industry and a price-taking firm that produces in that industry.The market demand and supply functions are estimated to be: Demand: Supply: where Q is quantity,P is the price of the product,M is income,and is the input price.The manager of the perfectly competitive firm uses timeseries data to obtain the following forecasted values of M and for 2021: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2021.The marginal cost function is: A)SMC = 3.0 0.0027Q + 0.0000009Q2 B)SMC = 3.0 0.00135Q + 0.00000045Q2 C)SMC = 3.0Q 0.0027Q2 + 0.0000009Q3 D)SMC = 3.0 0.0054Q + 0.0000018Q2 E)none of the above
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