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Firm Supply. Retirement Planning is a wholesale




1. Firm Supply.;Retirement Planning is a wholesale producer of standardized retirement plans for high net worth individuals. These plans are produced and e-mailed to financial planners who incorporate them in their client presentations. The following relation exists between the firm's output and total production costs in this highly price-competitive market;Total Output;Total Cost;0;$ 50;100;150;200;275;300;425;400;600;500;800;600;1,050;700;1,350;A. Construct a table showing the firm's marginal cost of production.;B. What is the minimum price necessary for the firm to supply one hundred plans?;C. How many plans would the firm supply at industry prices of $180 and $300 per hundred?;2. Short-run Firm Supply.;Give Me a Pane, Inc., distributes window glass to hardware and building supply chains located throughout the Northeast. Like several grain and commodity markets, the market for common single-pane glass is perfectly competitive. The company's technology defines a marginal cost per pound of single-pane glass given by the relation;MC = $1.00 + $0.0001Q;where Q is pounds of single-pane glass.;A. Calculate the industry price necessary for the firm to supply 10,000, 20,000, and 30,000 pounds.;B. Calculate the quantity supplied by the firm at industry prices of $1.50, $2.50, and $3.50 per pound.;3. Short-run Market Supply.;The Magazine Delivery Company is a typical firm in the perfectly competitive magazine delivery business. The company delivers magazines and stocks magazine racks at convenience stores located throughout the state of Kentucky. Marginal costs of service are described by the relation;MC = $5 + $0.4Q;where Q is racks of magazines delivered and serviced per week.;A. Derive the firm's supply curve, expressing quantity as a function of price.;B. Derive the market supply curve if the company is one of 200 competitors.;C. Calculate market supply per week at a market price of $25 per rack delivered and serviced.;4. Competitive Market Equilibrium.;Syracuse Paper supplies printer paper in upstate New York. Like the output of other wholesale distributors, Syracuse Paper must meet strict guidelines and the printer paper supply industry can be regarded as perfectly competitive. Total and marginal cost relations are;TC = $3,600 + $5Q + $0.01Q2;MC =? TC/? Q = $5 + $0.02Q;where Q is cases of printer paper per day.;A. Calculate the firm's optimal output and profits if prices are stable at $20 per case.;B. Calculate optimal output and profits if prices rise to $25 per case.;C. If Syracuse Paper is typical of firms in the industry, calculate the firm's equilibrium output, price, and profit levels.


Paper#33285 | Written in 18-Jul-2015

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