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Short-Run Market Supply. New England Textiles, Inc., is a medium-sized manufacturer of blue denim that sells in a perfectly c

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Answer #1

MC = 1 + 0.000016Q

Firm's supply curve is given by

P = MC and solve for Q

P = 1 + 0.000016Q

P - 1 = 0.000016Q

Q = 1/0.000016(P - 1)

= 62500(P - 1) ( 1/0.000016 = 62500)

So  Firm's supply curve Q = 62500(P - 1)

B) Now there are 500 competitors so

n = 500

Market supply Qs = nQ

= 500\times62500(P - 1)

= 31250000(P - 1)

C)

Market supply at P = 2

Qs = 31250000(2 - 1)

= 31250000

  

  

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Short-Run Market Supply. New England Textiles, Inc., is a medium-sized manufacturer of blue denim that sells in a perfectly competitive market. Given $25,000 in fixed costs, the total cost function f...
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