Suppose that each firm in a competitive industry has the following as the Total cost: TC=50+ ½q2 Where q is an individual firm’s quantity produced. The market demand curve for this product is Demand: Q = 120 – P Where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market What is each firm’s fixed cost? What is its variable cost? At what quantity efficiency of scale would be achieved? Give the equation for each firm’s supply curve Give the equation for the market supply curve for the short run What is the equilibrium price and quantit
Suppose that each firm in a competitive industry has the following as the Total cost: TC=50+ ½q2 Where q is an individual firm’s quantity produced. The market demand curve for this product is Demand: Q = 120 – P Where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market What is each firm’s fixed cost? What is its variable cost? At what quantity efficiency of scale would be achieved? Give the equation for each firm’s supply curve Give the equation for the market supply curve for the short run What is the equilibrium price and quantit
Chapter12: The Partial Equilibrium Competitive Model
Section: Chapter Questions
Problem 12.9P
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- Suppose that each firm in a competitive industry has the following as the Total cost: TC=50+ ½q2
Where q is an individual firm’s quantity produced.
The market demand curve for this product is
Demand: Q = 120 – P
Where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market
- What is each firm’s fixed cost? What is its variable cost?
- At what quantity efficiency of scale would be achieved?
- Give the equation for each firm’s supply curve
- Give the equation for the market supply curve for the short run
- What is the
equilibrium price and quantity for this market in the short run? - In this equilibrium, how much does each firm produce? Is there incentive for firms to enter or exit?
- In the long run with free entry and exit, what is the equilibrium price and quantity in this market?
- In the long-run equilibrium, how many firms are in the market?
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