Microeconomics help please. Below are the cost and demand curves for 2 firms: Wh

Question

Microeconomics help please.

Below are the cost and demand curves for 2 firms: What KIND of firm is firm A? If the price is $150, firm A should produce Q= to maximize profits. If firm A produces the output in question (21) they will earn profits equal to: $_Is firm A likely to be able to continue making these profits in the LONG RUN ? What is the maximum technical efficiency output level for firm (A) ? Q = At which output level does firm (A) have the lowest average fixed cost ? Q = What KIND of firm is firm (B) ? What is the profit maximizing output level for firm (B) ? Q = What price should firm (B) charge to sell the profit maximizing output ? P = $ How much profit can firm (B) make if they sell the Q from question (M) at the Price from question

Explanation / Answer

20. Perfectly competitive firm. Because demand curve is horizontal

21. Q = 150. Because at Q = 150, equilibrium condition MR = MC satisfied.

22. Profit = TR - TC = ($150*150) - ($50*150) = $15000

23. No, Because of this super normal profit, the new firms will enter into the market and output will increase and price will reduce till the firm earns normal profit.

24. Q = 100. Technical efficiency is concerned with producing at the lowest point on the short run average cost curve.

25. Q = 200. Fixed cost will be minimum when output is highest.

26. Monopoly. Because demand curve is downward sloping

27. Q = 50. Because at Q = 150, equilibrium condition MR = MC satisfied

28. P = $12

29. Profit = TR - TC = ($12*50) - ($2*50) = $500

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