Question

20 Points Each. Hand draw answers and upload. Consider a city that has cell phone case stands operating throughout the midtown area. Suppose each vendor has a marginal cost of $5.00 per case and no fixed cost. Suppose the maximum number of cell phone cases that any one vendor can sell is 70 per day. 1. If the price of a cell phone case is $15.00, how many cases does each vendor want to sell? B. If the industry is perfectly competitive, will the price remain $15.00 per case? If not, what will the price be? Why? B. If each vendor sells exactly 70 cell phone cases a day and the demand for cell phone cases for vendors in the city is Q=1000-20P, how many vendors are there?

Answer 1

Solution :- Given that marginal cost :- $500 Poice of a cell phone case - $ 15.00 price remain-$ 15.00 If price is 3000 as = p = 2800 + 50. 3000 = 2800 +50 200 - 50 = 40 Op = p = 4300 - 50 3000 = 4300-50 1300 = 50 = 260 B). If each vendos to sole exactly 70. Cell phone cases in a day Q = 1000 - 20p is dermand fun" p= 15 $given Q = 1000 – 2015) Q = 1000 - 300=700 Q = 700 each vendor sale 70 cell then how many vendors. = 700 = 110 Vendoo 70 CS Scanned with CamScanner