1. Suppose that fixed costs for a firm in the monopolistically competitive automobile indu $50 and that variable costs are equal to $50 per finished automobile ( marginal cost Because more firms increase competition in the market, the market price falls as more fir an automobile market, or specifically, P 50+ (20/n), wheren represents the number in a market. Assume the size of the U.S. industry is 1000. Use the internal economies theory to: (a) Calculate the equilibrum number of firms in the US uithout trade? (b) What is the equilbrium price of automobiles in the United States in autarky? (c) What is the equilibrium output per firm in the US in autarky?
1. Suppose that fixed costs for a firm in the monopolistically competitive automobile indu $50 and that variable costs are equal to $50 per finished automobile ( marginal cost Because more firms increase competition in the market, the market price falls as more fir an automobile market, or specifically, P 50+ (20/n), wheren represents the number in a market. Assume the size of the U.S. industry is 1000. Use the internal economies theory to: (a) Calculate the equilibrum number of firms in the US uithout trade? (b) What is the equilbrium price of automobiles in the United States in autarky? (c) What is the equilibrium output per firm in the US in autarky?
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter13: Between Competition And Monopoly
Section: Chapter Questions
Problem 5DQ
Related questions
Question
please do part C in 10 minutes will upvote (hand write)
![1. Suppose that fixed costs for a firm in the monopolistically competitive automobile industry are
$50 and that variable costs are equal to $50 per finished automobile ( marginal cost= $50).
Because more firms increase competition in the market, the market price falls as more firms enter
an automobile market, or specifically, P 50+ (20/n), where n represents the number of firms
in a market. Assume the size of the U.S. industry is 1000. Use the internal economies of scale
theory to:
(a) Calculate the equilibrum number of firms in the US without trade?
(b) What is the equilbrium price of automobiles in the United States in autarky?
(c) What is the equilibrium output per firm in the US in autarky?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9bb94b73-1447-45b2-931d-a92a6437f288%2F00716595-0acb-4e69-b617-524d470fe4d6%2F2duvyx_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1. Suppose that fixed costs for a firm in the monopolistically competitive automobile industry are
$50 and that variable costs are equal to $50 per finished automobile ( marginal cost= $50).
Because more firms increase competition in the market, the market price falls as more firms enter
an automobile market, or specifically, P 50+ (20/n), where n represents the number of firms
in a market. Assume the size of the U.S. industry is 1000. Use the internal economies of scale
theory to:
(a) Calculate the equilibrum number of firms in the US without trade?
(b) What is the equilbrium price of automobiles in the United States in autarky?
(c) What is the equilibrium output per firm in the US in autarky?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Microeconomics: Principles & Policy](https://www.bartleby.com/isbn_cover_images/9781337794992/9781337794992_smallCoverImage.jpg)
Microeconomics: Principles & Policy
Economics
ISBN:
9781337794992
Author:
William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:
Cengage Learning
![Microeconomics: Principles & Policy](https://www.bartleby.com/isbn_cover_images/9781337794992/9781337794992_smallCoverImage.jpg)
Microeconomics: Principles & Policy
Economics
ISBN:
9781337794992
Author:
William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:
Cengage Learning