# Suppose you are given the following information about a particular industry: Q^D = 6,500 - 100P:...

## Question:

Suppose you are given the following information about a particular industry:

{eq}Q^D = 6,500 - 100P {/eq} : Market demand.

{eq}Q^S = 1,200P {/eq} : Market supply.

{eq}C(q) = 722 + \frac{q^2}{200} {/eq} : Firm's total cost function.

{eq}MC(q) = \frac{2q}{200} {/eq} : Firm's marginal cost function.

Assume that all firms are identical, and that the market is competitive.

a) Find the equilibrium market price and quantity, the output supplied by the firm, and firm's profits.

b) Would you expect to see entry into or exit from the industry in the long-run? Explain. What effect will entry or exit have on market equilibrium?

c) What is the lowest price at which each firm would sell its output in the long run? Is profit positive, negative, or zero at this price? Explain.

d) What is the lowest price at which each firm would sell its output in the short run? Is profit positive, negative, or zero at this price? Explain.

## Competitive market.

Competitive market is a market structure characterized by many buyers and sellers with no barriers for entry or exit to and from the market. Firms continues to enter the market until the economic profit equals to zero. If firms are making economic losses, the firms will exit the market.

## Answer and Explanation: 1

Become a Study.com member to unlock this answer! Create your account

View this answer**a) Find the equilibrium market price and quantity, the output supplied by the firm, and firm's profits.**

{eq}Q_d=6500-100P\\Q_s=1200P {/eq}

At...

See full answer below.

#### Ask a question

Our experts can answer your tough homework and study questions.

Ask a question Ask a question#### Search Answers

#### Learn more about this topic:

from

Chapter 3 / Lesson 19Learn the competitive market definition and explore characteristics of a competitive market. Study competitive market examples that illustrate these characteristics.

#### Related to this Question

- Suppose the following information about a particular industry: Q^D = 4,800 - 100P (Market demand) Q^S = 1,500P (Market supply) C(q)=641 + {q^2}/{400} (Firm total cost function) MC(q)={2q}/{400} (Firm margi
- Suppose you are given the following information about a particular perfectly competitive industry: The market demand curve is Q = 6500 - 100P The market supply curve is Q = 1200P You are also given the following information about a single perfectly com
- Suppose you are given the following information about a particular perfectly competitive industry: The market demand curve is Q = 6500 - 100P The market supply curve is Q = 1200P You are also gi
- Consider a market that faces the following market supply and demand functions \\ Q^S = -2 + p\\ Q^D = 10 - \dfrac{1}{2}p\\ \\ where the identical firms face the total cost function of \\ TC = 4 + q + q^2 \\ A. What is the market price? B. Derive the ave
- Consider the following demand and cost functions: P = 16000 - 4Q Q = Q1 + Q2 C1(Q1) = 4000Q1 C2(Q2) = 6000Q2 1) Assume firm 1 successfully captures the entire market and is now a monopolist. a. What is the market output and price charged? b. What is firm
- The market demand for the product is P = 30 -0.75Q and the supply is P = 10 + 0.5Q.One of the firms in this market has a Total cost function as C = 200 ? 3q. Solve the below and label each answer. (a
- Consider a market that faces the following market supply and demand functions Q^S = -2 + p Q^D = 10 - 1/2 p where identical firms face the total cost function of TC = 4 + q + q^2 a) What is the market
- Suppose you are given the following information about a particular industry: Qd=7200-200P, Qs=1000P, C(q)=543+q^2/200 a. Find the equilibrium price, equilibrium quantity, the output supplied by each f
- In a perfectly competitive market, industry demand is given by the following equation: Q = 1,000 - 2P. The typical firm's total cost is given by the following equation: TC = 300Q + 0.33Q2. What is the MC function? What is the MR function? What is the prof
- Assume that a market is described by the following functions: Demand Function: Qd = 100 - 2P Supply Function: Qs = 3P a) Solve for the equilibrium price and quantity. b) If the Supply function changes to Supply Function = 10 + 3P while the demand func
- Consider the following supply and demand functions Qd = 14 - 2p Qs = -6 + 3p a. Assuming the market is distortion free, what is the total welfare level? b. Suppose a price floor of p = 5 were impl
- Suppose there are 1000 identical barley farmers. Each firm faces the following supply function and total cost function Industry demand for barley is captured by the following demand function:
- The demand function for a product is: p = 3 - (4/875)Q The total cost curve is c(q) = 1/4q + 1/10q^ + 10 The number of firms in this market is 175. 1. What is the industry short run supply curve?
- You are given the following information: (1) Your firm's demand equation is defined as follows: Q_d = 100 - 4P_A + 2P_s + .1I, where Q_d is the quantity demanded for your product, P_A is the price t
- Suppose we have a perfectly competitive market where at the equilibrium price the total market demand is 300 units. Each individual firm in the market has a cost function C(Q) = 50 -2Q + 1.1Q^2. Determine the number of firms that this market can support i
- Suppose a market has the demand function Qd=20-0.5P. At which of the following prices will total revenue be maximized? a. $20 b. $10 c.$30 d. $40
- A market is characterized by a demand curve that can be expressed as P = 96 - (1/3) Q. Each of the firms currently serving the market has a total cost function of the form C = 12 q so MC = ATC = 12. There are no fixed costs. a. If the market is served by
- Suppose a market has a demand function of Qd = 20 - 0.5P. At which of the following prices will total revenue be maximized? a. 30 b. 10 c. 20 d. 40
- Consider a market demand curve that can be expressed as P = 300 - 3Q. Each of the firms currently serving the market has a total cost function of the form C = 40q so MC = ATC = 40. There are no fixed
- Suppose that each firm has the long-run cost function c(y) = y^2 + 9 for y greater than 0 and c(0) = 0. The industry demand is given by D(p) = 51 - p. The equilibrium price in the long-run equilibrium of the industry in a perfectly competitive market is:
- Suppose that your firm faces the following demand function: p=35-4.3q. Also suppose that the cost structure for the firm is given by C(q)=7q^2+5 You know each consumer's WTP. What would be the quantity your firm will sell in this market?
- Suppose that the market demand curve for bean sprouts is given by P = 1,660 - 4Q, where P is the price and Q is total industry output. Suppose that the industry has two firms, a Stackleberg leader an
- Assume the following market demand and supply functions: Q^D = 28 - 2p, Q^{S} = 2p - 12 a. Calculate the perfectly competitive equilibrium price, quantity, CS, PS, a
- Suppose you have the following functions. The competitive market equilibrium is 180. Calculate consumer and producer surplus. Demand: P = 300 - 1.5Q Supply: P = 20 + 2Q
- Suppose that the market for sweaters is given by the following demand and supply functions: Demand: P = 90 - 0.3Q (Q is quantity demanded; P is price) Supply: P = 20 + 0.4Q (Q is quantity supplied; P is price).
- Market demand for certain product, Q_D = 900p^?1. Each firm's production function q_i = L_i^0.5. Suppose the price of labor is w = 2. (a) Suppose there is only one firm in the market. Derive the firm'
- Consider a market characterized by the following inverse demand and supply functions: P_X = 30 - 3Q_X and P_X = 10 + 2Q_X. Compute the surplus consumers receive when a $24 per unit price floor is impo
- Consider the following information: Inverse market demand: P=12-0.5(q_1+q_2) where q_1 and q_2 are Firm 1's and Firm 2's output Firm 1's reaction function:
- Suppose that there is a monopolist that faces the following linear demand in the market: Q_D = 100 - (1/4)P and has the following cost function: C(Q) = 16Q^2 + 10 What quantity will the monopolist
- Consider a market characterized by the following inverse demand and supply functions: P_X = 10 - 2Q_X and P_X = 2 + 2Q_X. What will a $4 per unit price floor result in?
- Consider a market consisting of two firms where the inverse demand curve is given by P = 500 - 2Q1 - 2Q2. Each firm has a marginal cost of $100. Based on this information, we can obtain the reaction
- Assume that the market demand in an industry is: P(Q) = 1 - Q, and that the cost functions of the firms are Ci(qi) = 0.5 qi + F, for all the firms i = 1, 2,...,n, where m is less than 1, and F is th
- 2. In a competitive market, suppose that the demand function is QD(P) = 34 - (P=2) and the supply function is QS(P) = 5P -10. (a) What is excess supply or excess demand at a market price of P=6?
- Suppose a firm with a monopoly faces the following demand schedule and can produce with total costs as provided in the table: Quantity of Output Price Total Costs 0 $80 $30 1 $70 $50 2 $60 $70 3 $50
- A monopolist has the following cost function. C = 4.9 Q^2 + 144Q + 1,531 Market demand is given by: P = 1,770 - 47Q Find the market price, P, if this market was perfectly competitive. Round your ans
- You are the manager of a business in a monopoly market with the following inverse demand function p=30-\frac{1}{10}q. In addition, assume your production technology is described by the total cost func
- Suppose that the following function summarizes the market demand for medical care: P=400-2Q And the market supply is summarized by the following function: P=50+3Q A) Calculate the equilibrium price, assuming no health insurance is available. B) Calculat
- A market is characterized by a demand curve that can be expressed as P = 400 - 5Q. Each of the firms currently serving the market has a total cost function of the form C = 50 q. There are no fixed cos
- Consider a market for a good with the following demand and supply functions: QD = 20 - 2P and QS = 5 + P. Calculate the consumers, producers, and total surplus.
- You are given the following demand and supply functions for a good: Qd = 60 - 10P, Qs = 10P. a) Find the equilibrium prie and quantity, and calculate the total revenue to firms in the market. b) Suppo
- Suppose you are given the following information about an industry: Demand P = 10 - Q . Supply P = Q - 4 where P is price in dollars per unit, and Q quantity in thousands. a. Find the equilibrium pric
- Consider a perfectly competitive firm that faces the following market demand and market supply curves: Demand : Qd = 10,000 -10,000P + 2M Supply: Qs = 40,000 + 10,000P - 4,000Pi M = 25,000 and Pi = 10 The firm has also estimated its AVC function to be e
- A commodity market is characterized by the following equations: Demand: P=70-(QD) Supply: P=10+2(QS) Assume that firms in this market manage to form a cartel to stabilize prices and that the total c
- Suppose that a perfectly competitive market has 100 consumers of its product and that each consumer's demand curve is identical to all the other individual demand curves. You are provided the following information about this competitive market. Individual
- Suppose that the market demand curve for bean sprouts is given by P = 1,660 - 4 Q, where P is the price and Q is total industry output. Suppose that the industry has two firms, a Stackleberg leader and a follower. Each firm has a constant marginal cost of
- Suppose that your firm faces the demand function p = 25 - 5.7q Also, suppose that the cost structure for the firm is given by C(q) = 15q^{2} + 5. You know each consumer's WTP, what would be the quantity your firm will sell in this market.
- Suppose that the market for sweaters is given by the following demand and supply functions: Demand: P = 90 - 0.3Q [Q is quantity demanded; P is price] Supply: P = 20 + 0.4Q [Q is quantity supplied; P is price] The equilibrium price is equal to $ _______ a
- Suppose that there are only two firms (Firm A and Firm B) in the market for decorative lampshades. Let the inverse demand function and the total cost function be given by P = 50 - Q and TC = 2Q The f
- A firm may sell its product in two different markets in which the demand functions are Market 1: P = 120-2Q Market 2: P = 429-10Q Total cost function is given the equation TC = 15+12Q (A) calculate
- Find the total market demand when you have been told that you cannot price discriminate between the two types of consumers. One has a demand function of P = 80 - 0.5Q and the other is P = 200 - Q. Explain how to find the total market demand and the profit
- Suppose the market is defined by the following demand and supply equations. Demand: Q = 138 - 2P, Supply: Q = 6 + 3P At a price of P = 40, what is the size of the surplus that will exist in the market?
- The function for demand in a market is (D: Q^D = 12 - P). What is the total willingness to pay for 1 unit $? Suppose the equilibrium price in this market is P^E = 9. Consumer surplus in this equilibrium is $[{Blank}].
- 0.2) One can gain insight by manipulating the price elasticity of demand equation. With the information provided below, demonstrate what happens in the specific markets. a) Suppose there is a technol
- Find the equilibrium price, quantity and revenue in a market characterized by the following information: Demand: Qd = 500 - 2P Supply: Qs = 3P
- Suppose the demand in a particular market is given by Q=5-P/2. At what price is the demand unit elastic?
- You're given the following demand and supply tables: a. Calculate market demand and market supply. |P|D1|D2|D3|DMarket |$30|20|5|10 | |40|15|3|7 | |50|10|0|5| | 60|5|0| 0 | ------ |P|S1|S2|S3|SMa
- You are given the following supply and demand curve functions for a market for sunglasses. Graph the following : Qd= -2 (p)+ 340 Qs = 5P-150 Graph the following: a. The supply curve; b. Consumer
- Suppose the market is defined by the following: Demand: Q = 135 - 2P Supply: Q = 6 + 4P At a price of P = 36, what is the size of the shortage that will exist in the market? What is the amount of the surplus at price P = 36?
- Problem II: A competitive market is defined by the following demand and supply functions: P = 210 ? 2Q and P = 30 + Q. a) Calculate total welfare oProblem II: A competitive market is defined by the f
- Suppose that the market demand for medical care is summarized by the following: p = 400, and the market supply is summarized by the following function: p = 50 +3Q. Health insurance is made available w
- Suppose that the market demand for medical care is summarized by the following function: P=400-2Q, and the market supply is summarized by the following function: P=50+3Q A) Calculate the equilibrium p
- Consider the following information about the market for hot dogs. It is a perfectly competitive market, and has the following demand curve: QD(P)=50-5P. Find the elasticity of demand at price P=5. The
- Suppose the market demand for a product is given by the following inverse demand equation P=100-2Q. Furthermore, you know that initially 40 units are demanded in this market. Then, there is an increase in price by 50%. a. What is the price elasticity of
- You are given the following demand and supply tables. A. Calculate the market demand and the market supply B. Draw the market demand and market supply curves
- Suppose that there are only two firms (Firm A and Firm B) in the market for decorative lampshades. Let the inverse demand function and the total cost function be given by: P-50-Q and TC =2Q Assume tha
- Consider a duopolist market with a demand functions of p = 150 - 25(qA + qB). Firm A has a cost function of CA = qA + qA^2, while firm B has a cost function of CB = 20 - qB + qB^2. a) Suppose first th
- Consider the following market demand and supply functions: Q^D = 26 - 2p Q^S = 3P - 9 a. What is the equilibrium price and quantity? b. Determine the total consumer surplus and producer surplus.
- Assume the market for a commodity is described by the following demand and supply functions. Demand: q = 30 - \frac{2}{3}p Supply: q = 2p - 10 A. Determine the equilibrium price and quantity in this market. B. Derive the inverse demand and supply function
- Given the following information graphically illustrate the demand and supply curves and solve for the market equilibrium: a) Q(d) = 200 - 5P, Q(s) = 50 + 5P b) Q(d) = 1000 - 20P, Q(s) = 200 + 5P c) P
- A firm has segmented its market into the following demand functions: P1 = 200 - 20Q P2 = 400 - 10Q with a cost function: MC=AC =10. Determine the profit maximizing price and quantity and correspo
- A firm has segmented its market into the following demand functions: P1 = 200 - 20Q P2 = 400 - 10Q with a cost function: MC=AC =10 Determine the profit maximizing price and quantity and correspondi
- Consider a market characterized by the following inverse demand and supply functions: P = 10 - 2 Q and P = 2 + 2 Q. Compute the surplus producers receive when an $8 per unit price floor is imposed on the market.
- Suppose that each of a firm's customers has the following demand curve: P = 20 - 2Q. Suppose also that the firm's total cost function is TC = 8Q. Strategy: An entrance fee and a per unit fee equal t
- Suppose each firm in a competitive market has the same cost function of C = 16 + q^2 and MC = 2q. The market demand function is Q = 24 - p. Find the following: a. Long-run market equilibrium price b.
- For each of the following market demand functions, compute the price elasticity of demand as a function of price, \epsilon = \frac{\delta q(p)}{\delta p} \cdot \frac{p}{q}. (Note: \frac{\delta q(p)}{
- 1. A price-discriminating monopolist faces the following inverse demand functions: In Market One it is P1 = 20-Q1 where P1 is the price charged in Market 1 and Q1 is the quantity demanded in Market 1. In Market Two it is P2 = 15-1.5Q2 where P2 is the pri
- Consider a market characterized by the following inverse demand and supply functions: PX = 30 - 3QX and PX = 10 + 2QX. Compute the surplus consumers receive when a $24 per unit price floor is imposed
- Consider a market in which the behavior of consumers is described by the inverse demand function p = 30 - 1/10q In addition, assume there is a monopoly in this market with the following total cost fun
- The market inverse demand function is : P = 240 ? 4 Q . For each of the following total cost functions , fill in the table: ( a ) C ( Q ) = Q 2 + 40 Q + 150 ( b ) C ( Q ) = 40 Q + 150 ( c ) C ( Q ) =
- Suppose the market demand for a good is described by the demand function P = 80 - 0.5Q. It follows that the total revenue function relating the total revenues (TR) to the quantity sold (Q) is: a. TR
- Suppose that the total market demand for a product consists of the demands of individual ''1'' and individual ''2''. The demand equations of the two individuals are given by the following equations: QD,1 =20-2P and QD,2 =40-8P. Suppose that the total mark
- Suppose in a perfectly competitive industry the market supply and demand forces combine to produce a short-run equilibrium price of $70. Further a single firm in this industry has a weekly total cost function expressed by the equation: TC = 200 + 25q - 6q
- A firm has the following total-cost and demand functions: C=1/3Q^{3} - 7Q^{2} + 111Q +50 and Q= 100-P. (a) Does the total-cost function satisfy the coefficient restrictions of (9.5 [a, c, d > 0 ; b<0
- Suppose the market demand function is Q=100-2P, where Q is total quantity, P is is market price. And in this market, there are two firms with MC=AV= $10. Find each of the following: a. Perfect competition price, quantity, and consumer surplus? b. Monopo
- Suppose the market for wheat is characterized by the following demand and supply functions: Qdx=10-0.25Px Qsx=0.5Px-5. Suppose the government imposes a price ceiling of $16. What is the deadweight los
- In a perfectly competitive market, which of the following determines the market price? A. market demand and a firm's supply B. market supply and a firm's demand C. a firm's demand and its supply D. market demand and market supply
- Given the following information, estimate the cross-price elasticity of demand. Are these two goods substitutes or compliments?
- Consider a perfectly competitive market with a market demand function of P=10-Q and a supply function P=Q. Consider a per unit tax of t=2. Which of the following is true? a) The quantity traded in this market equals 2. b) The quantity traded in this marke
- Suppose that inverse demand is given by p(Q) = a - bQ, where Q is total quantity supplied in the market. There are two firms in the market, each with a cost function of c(q) = cq A) If we were to as
- Suppose the market demand and supply functions are QD = 300 - 2P and QS = 4P - 204. a. Determine the equilibrium price and quantity in this market. b. You've researched and found that most firms in the market currently experience costs such that TC = 40
- Suppose in a perfectly competitive industry that the market supply and demand forces combine to produce a short-run equilibrium price of$70. Suppose further that a single firm in this industry has a weekly total cost function expressed by the equation: TC
- Consider a market characterized by the following inverse demand and supply functions: PX = 10 - 2QX and PX = 2 + 2QX. A $4 per unit price floor will result in a
- Suppose that inverse demand is given by p(Q) = A - BQ, where Q is the total quantity supplied in the market. There are two firms in the market, each with a cost function of c(q) = cq, now assume that the first firm moves before the second firm. A) Compar
- Consider a market for a good with the following demand and supply functions: QD = 20 - 2P and QS = 5 + P. Calculate the price and quantity in equilibrium.
- The Bramwell Corporation has estimated its demand function and total cost function to be as follows: Q = 25 - 0.05P TC = 700 + 200Q Answer the following questions either by developing demand and cos
- Consider a perfectly competitive industry. The market supply and market demand are given by: Q(D) = 240 - 4P, Q(S) = 4P. Assume the market is in short run equilibrium. What is the price that each co
- Assume a market subject to the following functions: Qs = 3P + 40 and Qd = -6P + 480. If the government places a $5 per-unit tax in the market, mathematically determine the market price and quantity be
- 1. Elasticities: Consider the following supply and demand functions qD = 12 2p qS = 3 + 3p a) Plot the supply and demand functions. b) What are the equilibrium price and quantity? c) At the equil
- Suppose that we have the following demand and supply functions. Q(sub)X=100-0.4P(sub)X Q(sub)X=40+0.2P(sub)X a. What is the equilibrium market price for product X? b. What is the equilibrium quantity
- Suppose that the market demand curve for bean sprouts is given by P = 820 - 2Q, where P is the price and Q is the total industry output. Suppose that the industry has two firms, a Stackelberg leader and a follower. Each firm has a constant marginal cost o