buletin ştiin ific - Facultatea de Stiinte Economice - Universitatea din ...

The economic equilibriumConsider the firm’s cost function in those markets structures: TC = Q 3 – 12Q 2 +60Q +128. Find the supply function of the firm or industry, using the exact formula for Marginal Cost:C m = CT’ (Q) = 3Q 2 – 24Q + 60 ant Q {0, 12}. The equations the revenues totals (TR), averages(P), and marginal’s (R m ) are presentation of Table 2Calculations of cost and revenue concepts for a price-taking firm are illustrated in Figures3 and 4.Table 2. The equations of average revenues (P), totals (TR) and marginal (R m )PerfectCompetitionMonopolisticCompetitionOligopolyPureMonopolyP = 60 P = 88 – 3,5Q P = 120 – 8Q P = 165 – 15QTR = 60Q TR = 88Q – 3,5Q 2 TR = 120Q - 8Q 2 TR = 165Q – 15Q 2R m = VT’ (Q) = 60 R m = 88 – 7Q R m = 120 – 16Q R m = 165 – 30QTo maximize its profits/ the firm must find the equilibrium price and quantity, P E and Q E(optimally), which give the largest profit, or the largest difference between TR and TC. Animportant result is that maximum profit will occur when output is at that level where the firm’smarginal revenue is equal to it marginal cost.Fig.3. Producer equilibrium in the short-run: global dataTC,TV900800700600500400300200100Lossa) Perfect CompetitionBreak-evenchartLossProfitTCTRTP max =128TV,TC900800700600500400300200100b) Pure MonopolyBreak-evenchartTP max =197TCProfitTR1 2 3 4 5 6 7 8 9 10 11 12 Q1 2 3 4 5 6 7 8 9 10 11 12 QTC,TVc) Monopolistic CompetitionmonopolisteTC,TVd) Oligopoly900800700Break-evenchartTC900800700Break-evenchartTC600500TP max=142TR600500TP max=160400300200Profit400300200ProfitTR1001001 2 3 4 5 6 7 8 9 10 11 12 Q1 2 3 4 5 6 7 8 9 10 11 12 Q37