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[QUOTE="Kyle Jones, post: 5286231, member: 572220"] Hello, I need help with parts 4b-4d and to know if everything I've done is correct.[U]A medical facility is faced with the following information concerning each MRI they provide. [/U]Q=2100-.5P MR=4200-4Q TC=400Q+5000 MC=$4001. Find profit maximizing level of output (Q*). Find P at Q*. MR = MC 4200 - 4Q = 400 3800 = 4Q Q = 950 P = 4200 - 2Q P = 4200 - 2(950) P = $2300[B]2. [/B]What is Total Revenue when the firm produces Q*? What is Total Cost when the firm produces Q*? TR = PxQ TR = 2300 x 950 TR = $2,185,000 TC = 400Q + 5000 TC = 400 x 950 + 5000 TC = $385,000[B]3. [/B]What is ATC at profit maximizing level of output? What is the firm’s profit? ATC = TC / Q ATC = 385,000 / 950 ATC = $405.26 Profit = TR – TC Profit = $2,185,000 - $385,000 Profit = $1,800,000[B]4. [/B]Is this a perfectly competitive firm or a non-perfectly competitive firm? [B]WHY? The firm is a non-competitive firm, because P is not equal to MC. The firm is non perfectly competitive because the MR curve is downward sloping. [/B]a. [B]If [/B]this is a perfectly competitive firm what will happen for them to achieve their long run profit position? What is the profit position(s)? [B]The firm will earn supernormal profits in the shorter run, but long run it will earn normal profits. [/B] b. [B]If[/B] this is a monopolistic competitive firm what will happen for them to achieve their long run profit position? What is the profit position(s)? c. [B]If[/B] this is a monopoly what will happen for the firm to achieve their long run profit position? What is the profit position(s)? d. [B]If[/B] this is an oligopoly what will happen for the firm to achieve their long run profit position? What is the profit position(s)? 5. Assume the government places a price control at P=$1500: [LIST=1] [*][LIST=1] [*]What kind of price control is this? [B]This is a price ceiling.[/B] [*]Give a positive statement concerning this price control.[B] A price ceiling above the equilibrium price has no effect on quantity supplied.[/B] [*]Give a normative statement concerning this price control. [B]The price ceiling is too low from the equilibrium price.[/B] [*]What will happen to the market when this price control is in place? [B]The price ceiling creates a shortage when the price is below the market equilibrium price.[/B] [/LIST] [/LIST] [/QUOTE]
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