The demand curve for luminous socks is given by Q=50 - 0.5P and the total cost...
The demand curve for luminous socks is given by
Q=50 - 0.5P
and the total cost function for any curve in the industry is C=4Q
a) what is the marginal cost of the firm
b)what is the change in price for a one-unit increase in output?
c) if an industry wee perfectly competitive what would be the industry output and price? Explain the procedure used to determine industry output and price.
Homework Answers
a. MC = d/dx(4Q) = 4
b. For a one unit increase in output, there is a decrease of $1 price
|
P |
Q |
|
0 |
50 |
|
2 |
49 |
|
4 |
48 |
c. Under perfect competition, the price is determined where MC=MR = 4
and the output at P = 4 is Q = 50-0.5P = 50-0.5*4 = 48
Add Answer to:
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