Business, 30.10.2019 05:31 Jasten

You are one of 5 identical firms (i. e., you all have the same costs) that sell widgets. each day you have a fixed cost of $9 to operate. the marginal cost of your first through fifth widgets are $1, $2, $3, $7, and $8, respectively. you have a capacity constraint of 5, and you can only produce a whole number of widgets.

a. what is the average variable cost (avc) for a firm that produces 2 widgets?

b. what is the market-level quantity supplied given a price of $2.50?

c. suppose the market-level demand is fixed at 18. in other words, there is perfectly inelastic demand. what is the equilibrium price in the short run?

d. given perfect competition, what will be the price in the long run?

Answers: 2

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Answer from: sonyarucker

a. $1.5; b. 10 units; c. $7; d. $6

Explanation:

There are 5 identical firms in a market.

These firms sell widgets.

The fixed cost of each firm is $9.

The marginal cost of your first through fifth widgets are $1, $2, $3, $7, and $8, respectively.

a. The total variable cost for producing two widgets

= $1 + $2

= $3

The average variable cost

= $\frac{TVC}{Q}$

= $\frac{3}{2}$

= $1.5

b. The firms will supply the level of output where the price is able to cover the marginal cost of production.

At the price level $2.5, the marginal cost of producing 2 units i.e $2 is being covered. So the firms will supply 2 units each. The market supply will be 10 units.

c. The equilibrium price will be such that it is able to cover the marginal cost of production and the average variable cost.

The average variable cost

= $\frac{TVC}{Q}$

= $\frac{13}{4}$

= $3.25

That price is $7, so it will be the equilibrium price.

d. In the long run, the equilibrium price will be determined at the point where price equals ATC.

The total variable cost for producing two widgets

= $1 + $2 + $3 + $7 + $8

= $21

The total cost

= TFC + TVC

= $21 + $9

= $30

The average total cost

= $\frac{TC}{Q}$

= $\frac{30}{5}$

= $6

So, the long run price will be $6.

Answer from: Quest

$527.7.if the following was the question $527.7 is the answer.students who are trying to raise funds have an agreement with a local pizza chain. the chain has agreed to sell them pizzas at a discount, which the students can then resell to families in the local community for a profit. it is expected that of the 500 families in the community, at most 70% will buy pizza. based on a survey of their personal preferences, the students believe that they should order no more than 120 cheese pizzas, no more than 150 pepperoni pizzas, and no more than 100 vegetarian pizzas. they also want to make sure that at least 20% of the total pizzas are cheese and at least 50% of the pizzas are pepperoni. they make a profit of $1.45, $1.75, and $1.98, respectively, for each cheese, pepperoni, and vegetarian pizza they resell. how many pizzas of each type should they buy?

Answer from: Quest

it's actually a very difficult task, due to not many people can make 2 million dollars in 2 years. besides that, to the not-so-realistic ideas, you can create a business. it could be practically anything, but make it into a business that isn't that known yet, you get me? also, lets not forget about stock market. that's where all the good stuff happens. use investments at the beginning and begin to raise up your business or whatever you're going to do. as this is a very non-realistic idea, it's still worth the shot!

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