Consider a Competitive Industry and a Price-Taking Firm That Produces

question 64

Multiple Choice

Consider a competitive industry and a price-taking firm that produces in that industry.The market demand and supply functions are estimated to be: Demand: Supply: where Q is quantity,P is the price of the product,M is income,and is the input price.The manager of the perfectly competitive firm uses time-series data to obtain the following forecasted values of M and for 2015: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2015.The marginal cost function is:

• A)SMC = 3.0 - 0.0027Q + 0.0000009Q²
• B)SMC = 3.0- 0.00135Q + 0.00000045Q²
• C)SMC = 3.0Q - 0.0027Q² + 0.0000009Q³
• D)SMC = 3.0 -0.0054Q + 0.0000018Q²
• E)none of the above

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Definitions:

Cochlea

A spiral-shaped cavity in the inner ear that plays a crucial role in the sense of hearing by converting sound vibrations into nerve impulses.

Ossicles

Three small bones in the middle ear that help in transmitting sound vibrations from the air to the fluid-filled cochlea.

Wavelength

The distance between successive crests of a wave, especially points in a sound wave or electromagnetic wave.

Sense of Color

is the capacity to perceive and distinguish between different colors, including their hues, saturation, and brightness, primarily mediated by the cone cells in the human eye.