2.Suppose that a market consists of 650 idetical fims, all with the same costcurve:TC(q) = 325q² + 0.3. The market demand is given by Qd(p) = 50 – p(a) What is the equilibriun price and quantity?(b) What quantity must each firm produce and sell at equilibrium?(c) Do fims make positive profits in the market equilibrium?(d) Calculate consumers' surplus, producers' surplus and total surplus.(e) The government imposes a tax of 12 per unit of the product on the suppliers. What will bethe new equilibrium price and quantity?(f) Do firms make positive profits at market equilibrium?(g) What will be the new consumes surplus, produces surplus and total surplus?(h) Calculate the value of the DWL imposed by the tax.

Given: Number of firms=650 TC(q)=325q2+0.3 Qd(p)=50-p Note: Due to multiple subparts being posted,…

2. Suppose that a market consists of 650 identical fims, all with the same cost curve: TC(q) = 325q² + 0.3. The market demand is given by Qd(p) = 50 – p (a) What is the equilibrium price and quantity? (b) What quantity must each firm produce and sell at equilibrium? (c) Do fims make positive profits in the market equilibrium?

2. Suppose that a market consists of 650 identical fims, all with the same cost curve: TC(q) = 325q² + 0.3. The market demand is given by Qd(p) = 50 – p (a) What is the equilibrium price and quantity? (b) What quantity must each firm produce and sell at equilibrium? (c) Do fims make positive profits in the market equilibrium?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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