. Suppose there are 100 identical firms in the perfectly competitive notecard industry. Each firm has a short-run total cost curve of the form: 1 C −q³ +0.2q² +4q+10 300 a) Calculate the firm's short-run supply curve with q (the number of crates of notecards) as a function of market price (P). b) Calculate the industry supply curve for the 100 firms in this industry. (Answer: Qs = 1000√P - 2000) c) Suppose market demand is given by: Q=-200P+8,000. What will be the equilibrium price-quantity combination? (Answer: P = $25; Q = 3000 units) d) Suppose everyone starts writing more research papers and the new market demand is given by: Q=-200P + 10,000. What is the new price-quantity equilibrium? How much profit does each firm make? (Answer: Ti = $576,14)

. Suppose there are 100 identical firms in the perfectly competitive notecard industry. Each firm has a short-run total cost curve of the form: 1 C −q³ +0.2q² +4q+10 300 a) Calculate the firm's short-run supply curve with q (the number of crates of notecards) as a function of market price (P). b) Calculate the industry supply curve for the 100 firms in this industry. (Answer: Qs = 1000√P - 2000) c) Suppose market demand is given by: Q=-200P+8,000. What will be the equilibrium price-quantity combination? (Answer: P = $25; Q = 3000 units) d) Suppose everyone starts writing more research papers and the new market demand is given by: Q=-200P + 10,000. What is the new price-quantity equilibrium? How much profit does each firm make? (Answer: Ti = $576,14)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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