13) The cobalt mining company is perfectly competitive. Each existing firm and every potential entrant faces an identical U- shaped average cost curve. The minimum level of average cost is $5 per ton and occurs when the firm produces y = 2 million tons of cobalt per year. The market demand curve for cobalt is Y = 205 - p, where Q is in millions of tons per year and the market price p is in dollars per ton. d) If the demand fell to Y = 185 - p, briefly expiain what you would expect to happen to the following in the long run: i) price. ii) firm quantity. iii) firm profits. iv) the number of firms.

13) The cobalt mining company is perfectly competitive. Each existing firm and every potential entrant faces an identical U- shaped average cost curve. The minimum level of average cost is $5 per ton and occurs when the firm produces y = 2 million tons of cobalt per year. The market demand curve for cobalt is Y = 205 - p, where Q is in millions of tons per year and the market price p is in dollars per ton. d) If the demand fell to Y = 185 - p, briefly expiain what you would expect to happen to the following in the long run: i) price. ii) firm quantity. iii) firm profits. iv) the number of firms.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

13) The cobalt mining company is perfectly competitive. Each existing firm and every potential entrant faces an identical U-
shaped average cost curve. The minimum level of average cost is $5 per ton and occurs when the firm produces y = 2
%3D
million tons of cobalt per year. The market demand curve for cobalt is Y = 205 - p, where Q is in millions of tons per year
%3D
and the market price p is in dollars per ton.
d) If the demand fell to Y = 185 - p, briefly expiain what you would expect to happen to the following in the long run:
i) price.
ii) firm quantity.
iii) firm profits.
iv) the number of firms.

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