Question

cW)=c Me=ry 14 (0) Consider a competitive industry with a large number of firms, U of which have identical cost functions (cy) = y2 + 1 for y> 0 and (0) = 0. Suppose that initially the demand curve for this industry is ven by DP) = 52 - p. (The output of a firm does not have to be an nteger number, but the number of firms does have to be an integer.) P=2 ya What is the supply curve of an individual firm? S(p) = 21 If there are n firms in the industry, what will be the industry supply curve? ACE 1 / 2 P Me= (b) What is the smallest price at which the product can be sold? p=ry= (c) What will be the equilibrium number of firms in the industry? (Hint: Take a guess at what the industry price will be and see if it works.) 29= Preguers, Dip)-50 # of fim: S:5 What will be the (d) What will be the equilibrium price? equilibrium output of each firm?- (slightl Thest (e) What will be the equilibrium output of the industry? than in (1) Now suppose that the demand curve shifts to Dp) = 52.5 - p. What will be the equilibrium number of firms? (Hint: Can a new firm enter the market and make nonnegative profits?)_ DCP) $25-2265 # of firmir. To we can't han 0.5 tim. more than (50.5 lost money actual # of firms: so 32.3-pa $2.5 tool su total de ( مار

could someon please explain how they got g h and i

i need the answer to 24.4

Answer 1

g. Equilibrium Price= $2.02

Equilibrium output=1.01

Equilibrium profit=0.02

reason- 52.5-p= 50p/2

105=52P

P*=$2.02

y*=2.02/2=1.01

ATC=1+1/y=1+1/1.01≈ 2

Profit=(P-ATC)*Q= (2.02-2)(1.01)=0.02

H. Equilibrium number of firms =51

Equilibrium Price=2

reason- P=$2

D=53-2=51

each firm y=1, So Number of firm= 51.

i. Equilibrium output= y=1

Equilibrium Profit= zero.

reason- Each firm will produce y1, Profit= (P-ATC)*Q= (2-2)(1)=$0

In the long run competitive firm earn zero profit.

If it helps kindly upvote