3. Suppose that the industry is aconstant cost industry and entryand exit of firms are allowed.Assume the firm's long-runcost function is given byLC = 9-0.2g +4q .a. Identify the most efficientplant size for the firm in thelong-run by calculating theequilibrium output level.Brief discuss the processused to get your answer.b. Calculateequilibrium market price inthis industry. Brief discussthe process used to get yourthelong-runanswer.c. If the market demand forthese firm's product is Q =8,000 - 200p", determinethe number of firms in themarket under a long-runequilibrium. Brief discussthe process used to get youranswer.

Given LC=1300q3-0.2q2+4q ... (1) The most efficient plant size of a firm in long run is…

3. Suppose that the industry is a constant cost industry and entry and exit of firms are allowed. Assume the firm's long-run cost function is given by LC =9-0.2g +4q. 300 a. Identify the most efficient plant size for the firm in the long-run by calculating the equilibrium output level. Brief discuss the process used to get your answer. b. Calculate the equilibrium market price in this industry, Brief discuss the process used to get your long-run answer. c. If the market demand for these firm's product is Q 8,000 200p", determine the number of firms in the market under a long-run equilibrium. Brief discuss the process used to get your answer.

3. Suppose that the industry is a constant cost industry and entry and exit of firms are allowed. Assume the firm's long-run cost function is given by LC =9-0.2g +4q. 300 a. Identify the most efficient plant size for the firm in the long-run by calculating the equilibrium output level. Brief discuss the process used to get your answer. b. Calculate the equilibrium market price in this industry, Brief discuss the process used to get your long-run answer. c. If the market demand for these firm's product is Q 8,000 200p", determine the number of firms in the market under a long-run equilibrium. Brief discuss the process used to get your answer.

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

3. Suppose that the industry is a
constant cost industry and entry
and exit of firms are allowed.
Assume the firm's long-run
cost function is given by
LC = 9-0.2g +4q .
a. Identify the most efficient
plant size for the firm in the
long-run by calculating the
equilibrium output level.
Brief discuss the process
used to get your answer.
b. Calculate
equilibrium market price in
this industry. Brief discuss
the process used to get your
the
long-run
answer.
c. If the market demand for
these firm's product is Q =
8,000 - 200p", determine
the number of firms in the
market under a long-run
equilibrium. Brief discuss
the process used to get your
answer.

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