(e) Suppose there is free entry and exit of firms in this industry.
The demand curve for a product is given by Q = 800 – 0.1P where P denotes price and Q denotes quantity of the product. The industry comprises large number of firms. Each firm's cost function is
C(q) = 2000 + 500q+ 20q2
(e) Suppose there is free entry and exit of firms in this industry. Upon entry, the firms act as price-takers. Find the equilibrium price and aggregate output. How many firms will be there in this industry in the long run?
Homework Answers
The demand curve for a product is given by Q = 800 – 0.1P
The demand curve for a product is given by Q = 800 – 0.1P where P denotes price and Q denotes quantity of the product. The industry comprises large number of firms. Each firm's cost function is C(q) = 2000 + 500q+ 20q2(c) Assuming that there are 20 firms in the industry. Find the industry supply function. Using industry supply and demand function find price and aggregate output in the short-run equilibrium.
(b) Find the short run supply function for each firm.
The demand curve for a product is given by Q = 800 – 0.1P where P denotes price and Q denotes quantity of the product. The industry comprises large number of firms. Each firm's cost function is C(q) = 2000 + 500q+ 20q2(b) Find the short run supply function for each firm.
(d) Let qmin denote the value of q that minimizes AC
The demand curve for a product is given by Q = 800 – 0.1P where P denotes price and Q denotes quantity of the product. The industry comprises large number of firms. Each firm's cost function is C(q) = 2000 + 500q+ 20q2(d) Let qmin denote the value of q that minimizes AC. Also, let ACmin denote the value of AC at q = qmin. Find qmin and ACmin
1. (25 points) The market for study desks is characterized by perfect competition. Firms and consumers are price takers and in the long run there is free entry and exit of firms in this industry. Al...
1. (25 points) The market for study desks is characterized by perfect competition. Firms and consumers are price takers and in the long run there is free entry and exit of firms in this industry. All firms are identical in terms of their technological capabilities. Thus the cost function as given below for a representative firm can be assumed to function faced by each firm in the industry. The total cost and marginal cost functions t the representative firm are...
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2. Entry or exit in the long run Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC). Place the black point (plus symbol) on the graph to indicate the short-run profit maximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss.Given...
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2. Entry or exit in the long runFantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC).Place the block point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this manapalistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's probit or loss.Given the...
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3. How short-run profit or losses induce entry or exitFantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC).Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or...
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1. (25 points) The market for study desks is characterized by perfect competition. Firms and consumers are price takers and in the long run there is free entry and exit of firms in this industry. All firms are identical in terms of their technological capabilities. Thus the cost function as given below for a representative firm can be assumed to function faced by each firm in the industry. The total cost and marginal cost functions t the representative firm are...
12. In the long run: A. there will be no entry or exit of firms in this industry B. new firms enter the industry and curve A shifts to the right. C. firms exit this industry and curve A shifts to the left D. new firms enter this industry and curve F shifts to the right Questions 1- 14 refer to Figure 1 I. The industry's short-run supply curve is curve A. A H B. С.Е. D. F 2. The...
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