Suppose the inverse industry supply curve is given as = 5 + (10/n)q where n is...
Suppose the inverse industry supply curve is given as = 5 + (10/n)q
where n is the number of firms that are in the industry and q is industry output. Suppose the inverse industry
demand is given as p = 20 − q.
(i) Draw the inverse industry supply curve when there are n=1,2,3,4,5 on the same
diagram. Also draw the inverse industry demand on the same diagram.
(ii) Determine the equilibrium industry price and total industry quantity supplied when
there are n=1, n=3, and n=5 firms algebraically.
(iii) Comment on what happens to the equilibrium market price as the number of firms
enters the industry.
Homework Answers
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Suppose the inverse industry supply curve is given as = 5 +
(10/n)q
where n is...
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10. Suppose the demand for towels is given by Q- 100-5P, and the supply of towels...
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6. Suppose all firms in a given industry have the same supply curve given by S(p) p/2. There is free entry into the industry (a) Plot and label the four industry supply curves generated by these firms if there are 1, 2, 3, or 4 firms operating in the industry (b) If all of the firms had a cost structure such that if the price was below $3, they would be losing money, what would be the equilibrium price and...
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Diagram also please
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