2. A firm sells its output in a PCM. The firm's short-run cost function given SC = T q' -0.2g* + 4q + 10. a. Derive the short-run supply function of a typical firm in this industry. is by b. Assuming that there are 100 identical firms in this industry, derive the short- run market supply function. c. If currently the market demand for these firm's product is Q 200p", determine the short- equilibrium market price. 8,000 run d. At this equilibrium market price, calculate the level of output and profit that each firm produces in the short- run. With this information, comment on the potential entry/exit of firms in this industry in the long-run.
2. A firm sells its output in a PCM. The firm's short-run cost function given SC = T q' -0.2g* + 4q + 10. a. Derive the short-run supply function of a typical firm in this industry. is by b. Assuming that there are 100 identical firms in this industry, derive the short- run market supply function. c. If currently the market demand for these firm's product is Q 200p", determine the short- equilibrium market price. 8,000 run d. At this equilibrium market price, calculate the level of output and profit that each firm produces in the short- run. With this information, comment on the potential entry/exit of firms in this industry in the long-run.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:2. A firm sells its output in a
PCM. The firm's short-run cost
function
given
SC = 9'-0.29 + 4g + 10.
a. Derive the short-run supply
function of a typical firm in
this industry.
is
by
b. Assuming that there are 100
identical firms in this
industry, derive the short-
run market supply function.
c. If currently the market
demand for these firm's
product is Q =
200p", determine the short-
run equilibrium market
price.
= 8,000 -
%3D
d. At this equilibrium market
price, calculate the level of
output and profit that each
firm produces in the short-
run. With this information,
comment on the potential
entry/exit of firms in this
industry in the long-run.
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