All firms in a competitive industry have the following (firm-level) long-run total cost curve: C(q) =...
All firms in a competitive industry have the following (firm-level) long-run total cost curve:
C(q) = q3–10q2 + 36q
where q is the output of the firm.
a. Compute the long run equilibrium price. What does the long-run
supply curve look like if this is a constant cost industry?
Explain.
b. Suppose the market demand is given by Q = 111–p. Determine the
long-run equilibrium number of firms in the industry.
Homework Answers
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All firms in a competitive industry have the following
(firm-level) long-run total cost curve:
C(q) =...
1. All (identical) firms in a competitive industry have the following long-run total cost curve: C(q)...
1. All (identical) firms in a competitive industry have the following long-run total cost curve: C(q) = q3 – 10q2 + 369 where q is the output of the firm. a. Compute the long run equilibrium price. What does the long-run supply curve look like? b. Suppose the market demand is given by Q=111 - p. Determine the long-run equilibrium number of firms in the industry.
All firms in a competitive industry have the following long-run total cost curve: where q is...
All firms in a competitive industry have the following long-run total cost curve: where q is the output of the firm. a. Compute the long run equilibrium price and explain how you obtain the result [20 marks] b. Suppose the market demand is given byp 10- Q. Determine the long-run equilibrium number of firms in the industry c. Suppose that the same market is instead served by a monopolist who shares the same technology described by the long-run total cost...
(a) All firms in a perfectly competitive industry face the same long-run average cost curve, AC...
(a) All firms in a perfectly competitive industry face the same long-run average cost curve, AC = 0.05q – 5 + 500/q, and the same long-run marginal cost curve given by MC = 0.1q – 5. The market demand for the product of these firms is QD = 100,000 – 10,000P. i.Calculate the equilibrium price and quantity. ii.Assuming the market is in long-run equilibrium, how many firms will be on the market? (b) Suppose the demand for cotton T-shirts is...
i) The long run cost function for each firm in a perfectly competitive market is c(q)...
i) The long run cost function for each firm in a perfectly competitive market is c(q) = 2^1.5+16q^0.5, LMC = 1.59^0.5+ 8q^-0.5, market demand curve is Q=1600-2p. Find price (p) of output and the level of output (q) produced by the firm in a long run equilibrium. Find the long run average cost curve for the firm. ii) what happens in the long run if the market demand curve shifts to Q=160-20p?/ -A competitive industry is in long run equilibrium....
For a constant cost industry in which all firms the same cost functions, their long-run average...
For a constant cost industry in which all firms the same cost functions, their long-run average cost is minimized at $10 per unit output and 20 units (i.e. q = 20). Market demand is given by QD=DP=1,500-50P. Find the long-run market supply function Find the long-run equilibrium price (P*), market quantity (Q*), firm output (q*), number of firms (n), and each firm’s profit. The short-run total cost function associated with each firm’s long-run costs is SCq=0.5q2-10q+200. Calculate the short-run average...
Suppose that all firms in a constant-cost industry have the following long-run cost curve: C(q) =...
Suppose that all firms in a constant-cost industry have the following long-run cost curve: C(q) = Aq? + Bq+C where A = 4, B = 100, and C = 167. Suppose a firm is required to have a permit to operate and the number of permits is fixed at 90, so that there are 90 firms operating. Suppose the market demand is the following: D(p) = X – Yp where X = 1,120 and Y = 2. If firms could...
Consider a competitive industry with a large number of firms, all of which have the cost...
Consider a competitive industry with a large number of firms, all of which have the cost function c(y) = y 2 + 1 for y > 0 and c(0) = 0. Note that the marginal cost for this cost function is MC = 2y for y > 0. Suppose that initially the demand curve for this industry is given by D(p) = 84 − p. Note that the output of a firm does not have to be an integer number,...
Answer just part b ) All firms in a perfectly competitive industry face the same long-run...
Answer just part b ) All firms in a perfectly competitive industry face the same long-run average cost curve, AC = 0.05q – 5 + 500/q, and the same long-run marginal cost curve given by MC = 0.1q – 5. The market demand for the product of these firms is QD = 100,000 – 10,000P. i. Calculate the equilibrium price and quantity. ii. Assuming the market is in long-run equilibrium, how many firms will be on the market? (b) Suppose...
4) Suppose each firm's long run average cost curve, for positive levels of output, is given by AC 0.10.05Q+5/Q. The...
4) Suppose each firm's long run average cost curve, for positive levels of output, is given by AC 0.10.05Q+5/Q. The marginal cost curve is given by MC 0.+0.1Q. (a) Find the minimum efficient scale for the above cost function (b) What is the firm's minimum average cost? (c) Suppose you have many identical firms in a long run competitive equilibrium. Demand is P 13.1-0.040. What is the market quantity? How many firms are there? (d) Suppose demand increases to P...
2. (1.5 p) Consider perfectly competitive industry with identical firms. The long run average cots function...
2. (1.5 p) Consider perfectly competitive industry with identical firms. The long run average cots function of a typical firm is given by AC(q)- 24 - 49 + q. Market demand is given by c p)=100-2p. (a) Find the long run supply curve of the typical firm. (b) Find the number of firms in the industry in the long run equilibrium.
1. All (identical) firms in a competitive industry have the following long-run total cost curve: C(q) = q3 – 10q2 + 369 where q is the output of the firm. a. Compute the long run equilibrium price. What does the long-run supply curve look like? b. Suppose the market demand is given by Q=111 - p. Determine the long-run equilibrium number of firms in the industry.
All firms in a competitive industry have the following long-run total cost curve: where q is the output of the firm. a. Compute the long run equilibrium price and explain how you obtain the result [20 marks] b. Suppose the market demand is given byp 10- Q. Determine the long-run equilibrium number of firms in the industry c. Suppose that the same market is instead served by a monopolist who shares the same technology described by the long-run total cost...
i) The long run cost function for each firm in a perfectly competitive market is c(q) = 2^1.5+16q^0.5, LMC = 1.59^0.5+ 8q^-0.5, market demand curve is Q=1600-2p. Find price (p) of output and the level of output (q) produced by the firm in a long run equilibrium. Find the long run average cost curve for the firm. ii) what happens in the long run if the market demand curve shifts to Q=160-20p?/ -A competitive industry is in long run equilibrium....
Suppose that all firms in a constant-cost industry have the following long-run cost curve: C(q) = Aq? + Bq+C where A = 4, B = 100, and C = 167. Suppose a firm is required to have a permit to operate and the number of permits is fixed at 90, so that there are 90 firms operating. Suppose the market demand is the following: D(p) = X – Yp where X = 1,120 and Y = 2. If firms could...
4) Suppose each firm's long run average cost curve, for positive levels of output, is given by AC 0.10.05Q+5/Q. The marginal cost curve is given by MC 0.+0.1Q. (a) Find the minimum efficient scale for the above cost function (b) What is the firm's minimum average cost? (c) Suppose you have many identical firms in a long run competitive equilibrium. Demand is P 13.1-0.040. What is the market quantity? How many firms are there? (d) Suppose demand increases to P...
2. (1.5 p) Consider perfectly competitive industry with identical firms. The long run average cots function of a typical firm is given by AC(q)- 24 - 49 + q. Market demand is given by c p)=100-2p. (a) Find the long run supply curve of the typical firm. (b) Find the number of firms in the industry in the long run equilibrium.
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