In a perfectly competitive market, a firm has the following short-run total cost function:
C(q)=16+4q+q2
The market demand is
Q(p)=220-p
a. Show that marginal cost curve passes through the minimum point of average cost curve. Draw a figure to show it.
b. Find the firm’s individual short-run supply function. Draw it on the above figure. For the following questions, suppose that there are currently 10 identical firms in this market.
c. What is the market supply curve? What are the market equilibrium price and quantity?
d. In equilibrium, how much does each firm produce? How much is its profit? (It is short run, so it is possible for a firm to earn positive profit)
In a perfectly competitive market, a firm has the following short-run total cost function: C(q)=16+4q+q2 The...
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Suppose there is a perfectly competitive industry where all the firms are identical with identical cost curves. Furthermore, suppose that a representative firm’s total cost is given by the equation TC = 100 + q2 + q where q is the quantity of output produced by the firm. You also know that the market demand for this product is given by the equation P = 900 - 2Q where Q is the market quantity. In addition, you are told that...
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