Question: Let X denote 3011; Consider a firm with a marginal cost function given by MC(q) = X + q. 1); If there is no fixed cost, what is the firm’s supply function?

Part I 
Q1.  Let X denote 3011.
Consider a firm with a marginal cost function given by MC(q) = X + q.
1) If there is no fixed cost, what is the firm’s supply function?
2) If the fixed cost is FC=100, what is the firm’s supply function?
3) For each case, calculate the producer surplus and the total profit. Does it make sense to the firm to
enter this market?

Q2. Consider a perfectly competitive firm in a market where the price of a good is $20.
I. The firm can sell any number of units of this good for $20.
II. The marginal revenue earned by this firm is $20.
III. The firm cannot charge prices below $20.
Which of the above statements are true of the firm?
(a) Only I
(b) Only II
(c) Only III
(d) I and II
(e) I and III
(f) II and III
(g) I, II, and III
(h) None of the above


Q3. Consider the following statements about a firm.
I. The firm produces more of a good than any other firm in its’ market
II. The firm can increase prices only if it is willing to lose market share
III. The firm can increase quantity only if is willing to lower prices
Which of the above claims are a sign that it has market power?
(a) Only I
(b) Only II
(c) Only III
(d) I and II
(e) I and III
(f) II and III
(g) I, II, and III
(h) None of the above

 

Part 2
Your task is to find an article in a news outlet that describes an episode in market competition, in which a firm is shown to have market power.
In your answer, you need to provide the following:

1) The link to the article that you used. (If the article in a foreign language, add pages with translation
using Google Translate, ChatGPT, or another translation service.)
2) The name of a company and the product in the market in which it operates. (The firm might be
operating in many markets and sell many products or services; choose one.)
3) Some evidence, from this article, that the firm has some market power. You may quote any number
of sentences from this article, but your explanation shouldn’t be more than 2 sentences.
4) A name of another firm in the same market that might be affected by the actions of the firm with
market power. (If the firm you choose in 2) is a pure monopoly, say so.)