23. Suppose a farmer is a price taker (MR = P = 6) in soybeans with cost functio
ID: 1118632 • Letter: 2
Question
23. Suppose a farmer is a price taker (MR = P = 6) in soybeans with cost functions given by TC = .1q2 + 2q + 100 MC = .2q + 2 The firm’s supply curve is given by
a. .2q + 2 c. .1q
b. .1q + 2 d. .2q
24. Suppose a farmer is a price taker (MR = P = 6) in soybeans with cost functions given by TC = .1q2 + 2q + 30 MC = .2q + 2 The level of profit is
a. 10 c. 60
b. 0 d. 150
25. Suppose a farmer is a price taker (MR = P = 8) in soybeans with cost functions given by TC = .1q2 + 2q + 30 MC = .2q + 2 The level of profit is
a. 10 c. 60
b. 0 d. 150
26. Suppose a farmer is a price taker (MR = P = 10) in soybeans with cost functions given by TC = .1q2 + 2q + 30 MC = .2q + 2 The profit maximizing level of output is
a. 0 c. 40
b. 30 d. 50
27. Suppose a farmer is a price taker (MR = P = 12) in soybeans with cost functions given by TC = .1q2 + 2q + 100 MC = .2q + 2 The profit maximizing level of output is
a. 0 c. 40
b. 30 d. 50 5
28. Suppose a farmer is a price taker in soybeans with cost functions given by TC = .1q2 + 2q + 100 MC = .2q + 2 Suppose the farmer has to purchase a license for $50, the new marginal cost function is
a. still MC = .2q + 2 c. MC = .2q + 52
b. MC = .2q + 50 d. MC = 50
29. Suppose a farmer is a price taker in soybeans with cost functions given by TC = .1q2 + 2q + 30 MC = .2q + 2 Suppose the farmer has to purchase a license for $50, the new total cost function is
a. still TC = .1q2 + 2 c. TC = .1q2 + 2q + 50
b. TC = .1q2 + .2q + 80 d. TC = 50
30. Suppose a farmer is a price taker in soybeans with cost functions given by TC = .1q2 + 2q + 100 MC = .2q + 2 Suppose the farmer has to pay a 10% tax on revenue. The new profit maximizing level of output is
a. unaffected by the tax. c. decreased because of the tax.
b. increased because of the tax.
31. Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10, so that marginal cost is MC = 2q +1. The supply curve for each firm is
a. P = 2q + 1 c. P = q + 1 + 10/q
b. P = q2 + q + 10 d. P = q + 1
32. Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10, so that marginal cost is MC = 2q +1. The market supply curve is
a. QS = -50 + 50P c. QS = -100 + 100P
b. QS = - + P d. QS = -50 + 50P2
33. Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10, so that marginal cost is MC = 2q +1. If market demand is given by QD = 1050 - 50P, what is the equilibrium price?
a. 5 c. 11
b. 10 d. 50
34. Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10, so that marginal cost is MC = 2q +1. If market demand is given by QD = 1050 - 50P, how much will the individual firm produce?
a. 3 c. 5
b. 4 d. 6
35. Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10, so that marginal cost is MC = 2q +1. If market demand is given by QD = 1050 - 50P, how much will be produced in the market?
a. 300 c. 500
b. 400 d. 600
36. Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10, so that marginal cost is MC = 2q +1. If market demand is given by QD = 1050 - 50P, profit to the firm will be
a. 5 c. 9
b. 6 d. 15 6
37. Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10, so that marginal cost is MC = 2q +1. If market demand is given by QD = 1050 - 50P, in the long run the number of firms will
a. rise c. remain unchanged
b. fall
Explanation / Answer
23. The answer is option a, because in a price taker firm supply is given by MC.
24. The firm will produce where P = MC.
6 = 0.2q+ 2, 4 =0.2q, q=20. TC = 110 TR = 120 ,Profit = TR-TC = 10
So answer is option a)
25. Now q = 30. TC = 180, TR =180. Profit = 0.
So answer is option b.
26 Now put 0.2q+2 = 10 . This gives q = 40. SO correct option is c
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