Suppose in a competitive market, the long-run cost function of a firm is ?(?) = 0.66874?5⁄4 + 1,280 where x is the output.
(a) What is the minimum long-run average cost? At what output level is this attained?
(b) Suppose all firms are identical, what is the long-run profit of each firm in the competitive market? What is the long-run equilibrium price?
(c) Suppose there are 64,000 consumers each with demand function xd(p) = 625/p2 How many firms exist in the long-run?
(d) On a diagram, show the market long-run equilibrium.
We are supposed to do only these many subparts to a question. For solution to other parts of the question please post as a separate question.
Suppose in a competitive market, the long-run cost function of a firm is ?(?) = 0.66874?5⁄4...
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